Oil prices may continue to decline unless OPEC digs deeper and cuts oil production even more. U.S. oil production is increasing, compensating for the OPEC oil production cuts, and the excess oil is creating a glut on the market
There were 5,946 drilled-but-uncompleted wells in U.S. shale oil fields at the end of May--almost 40 percent more than two and a half years ago.1 These drilled but uncompleted (DUC) wells will provide new oil supplies when they are completed for consumption later this year and into next year. This U.S. oil boom is clearly a problem for the Organization of Petroleum Exporting Countries (OPEC), who have been limiting oil production in member states and obtaining agreements from some non-OPEC countries to limit output in an attempt to raise oil prices. The influx of American crude, however, is compensating for the OPEC and non-OPEC cuts in oil production, making it difficult to sustain oil prices in the $50 to $60 range. In fact, oil prices are in the $40 per barrel range currently and there are fears it may go below that.
