Market adjustment in US shale oil industry should lead to price recovery

At the current price level of less than $35 per barrel for Bakken oil, many smaller-scale US shale oil producers are unlikely to be able to cover their costs. They had taken the price increase to $60 per barrel in the spring as an opportunity to drill increasingly for oil again, and now see themselves confronted with much lower prices.

Without new external sources of funding, they are likely to exit the market sooner or later. This process of market adjustment should result in a noticeable decrease in US oil production and allow prices to recover in the later course of the year, says Commerzbank.