The Impact Of Us Shale Oil On The Global Oil Market

We examine production from horizontal wells in the Bakken Shale since April of 2015. We find evidence of rapid technological progress, geographic heterogeneity within the play, interference across wells that diminishes production, and that this source of supply is more price-elastic than non-OPEC supply as a whole. We also find the familiar rapid early decline rates characteristic of shale oil, but that production continues at some level long after these early declines. On balance, these results support the view that shale oil has a stabilizing effect on world oil prices.