“This is a historic turning point,” Daniel Yergin, an energy historian, told the New York Times. “The defining force now in world oil today is the growth of US production. The outcome of the OPEC meeting is a clear indication that the oil exporters now recognize that this is a new market.”
Thanks to a boom in hydraulic fracturing, the US has increased its crude oil production from around 5,100 barrels per day in 2008 to more than 8,000 barrels this year: in September 2014 production averaged 8,864. Confounding expectations that the fracking surge would be only short-lived, the US oil and gas industry has managed to increase its productivity thanks to technological innovation which allows greater volumes of oil and gas to be exploited from underground formations.
According to data from Bloomberg, on Friday US WTI was down 10.23% at $66.15 a barrel, while Brent was priced at $70.15 a barrel, down 3.35%, for January settlement. On Thursday, Leonid Fedun, vice president of Russian Lukoil, said the OPEC decision will bring about a crash in the US shale oil surge. “In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again,” he told Bloomberg in an interview in London