As oil prices slip from their lofty perch, the effect on U.S. shale producers remains to be seen — but an impact, if any, is going to be on a play-by-play basis, analysts said.
Brent, the international benchmark for crude, had soared above $115 in June, a peak for 2014. Last week, it dropped to $86.16 per barrel. Meanwhile, the U.S. benchmark for crude at West Texas Intermediate (WTI) slipped to $82.75 per barrel last week.
Prices have been dropping because of a combination of factors, including sluggish economic growth and slowing global demand. Also playing a role is growing U.S. oil production from shale plays. U.S. crude oil production soared to about 7.4 million barrels per day in 2013, according to the U.S. Energy Information Administration.
Meanwhile, Saudi Arabia, which produced about 9.6 million barrels per day in 2013, has indicated it would rather cut prices than production, reasserting its place in the market and putting pressure on fellow members of OPEC, or Organization of the Petroleum Exporting Countries.