“This belief is questionable, however, since U.S. producers have been raising oil production ever since OPEC struck a deal to curb production in a bid to improve prices. In fact, according to most analysts, it is precisely this increase in U.S. crude output that has been acting as counter-pressure against hopes of a reduction in the global oil glut, keeping the oil price rise within tight limits,” reports OilPrice.com.
Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices. Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term.
“In the week to February 17, output in the shale patch exceeded 9 million bpd for the first time since last April, official data showed, supporting forecasts that shale boomers are determined to continue its growth, investing in new developments and continuing to work on reducing costs,” notes OilPrice.
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