SO, BASICALLY, THINGS ARE SHAPING UP FOR THE US TO BE THE NEXT SAUDI ARABIA: Oil Faces a Looming Supply Problem.

An oversupply can be a good problem to have, especially if you’re not the producer, but for the oil industry, low prices can create some medium-term headaches. In their attempts to adapt to the new market reality, oil companies around the world have had to cut their capital expenditure budgets to try and stay in the black. That’s meant a lot less cash has been spent on the exploration of new projects, and that could prove costly when the current generation of oil operations mature without new fields to transition to. . . .

The one outlier at the moment is U.S. shale, which has been ramping up output in recent months as producers find new ways to stay in the black even at $50 crude. Here in the states, companies are still spending on exploration and being rewarded for it, in large part because the scale of these so-called “unconventional” projects is much smaller than more conventional fields, which makes the up-front capital costs easier to bear for these companies in today’s bearish market. “The key question for the future of the oil market,” said IEA executive director Fatih Birol, “is for how long can a surge in US shale supplies make up for the slow pace of growth elsewhere in the oil sector.”

Well, maybe not, but we’re positioned to do well.