By Urvashi Verma
Afer nearly two and a half years of barren fields, U.S. shale producers are restoring operations as oil prices have rebounded from increased demand from Asia and OPEC production cuts.
The Brent and WTI crude oil prices have increased 13.0 and 9.4 percent respectively reaching above the $50 per barrel mark since November after the Organization of Petroleum Exporting Countries made a historic move to cut production by nearly 1.2 million barrels per day.
Less than two months later, shale oil output is rising as higher prices have made it more profitable for U.S. producers to restart operations.
In the first week of January alone, oil output jumped by 176,000 barrels per day to 8.95 million barrels per day from 8.77 million, according to the U.S. Energy Information Administration’s Short-Term Energy Outlook.
This week Exxon Mobil Corp. announced it intends to invest $5.3 billion in shale-oil assets in the Permian Basin, which would give Exxon access to nearly 275,000 acres amounting to 3.4 billion barrels of oil and gas, a substantial increase in the company’s shale footprint.
“This is a more responsive supply market than in the past,” said Sam Ori, executive director of the Energy Policy Institute at the University of Chicago in an interview. U.S. shale companies are able to extract oil in just six to nine months, while offshore drilling needs nearly three years to produce oil, said Ori…
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