OPEC Imposes ‘Swing Producer’ Role upon U.S. Shale: Evidence and Implications

Jim Krane and Mark Agerton note that unique characteristics of U.S. shale oil production have allowed it to assume part of the “swing supply” role rejected by OPEC in November. Emerging data show that falling oil prices appear to have brought about deep cutbacks in shale drilling and reduced volumes of new oil. Shale producers' ability to respond quickly to prices is a valuable asset in an industry characterized by volatile cycles of over-production and shortage.