Effects of US foreign and domestic shocks on US shale oil production across different basins
Embargo Lift Date: 2024-10-09
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Developments in shale oil production technologies made the US, already the most important oil consumer, an important oil producer and exporter. This paper examines the response of shale oil production across eight production basins in the US to both US domestic and foreign oil demand shocks. The empirical evidence reveals that shale oil production in the Permian basin responds to PADD 3 Exports shocks faster, and Western/Eagle Ford responds more rapidly to Refinery Utilization Rate shocks. On the other hand, the Appalachian basin responses to PADD 3 Exports and Refinery Utilization Rate shocks are slower/weaker than other basins. Moreover, basins closer to the PADD 3 region have stronger responses, whereas basins farther from the PADD3 have weak ones.