Shale revolution in North America pushed up oil supplies but disruptions in conventional oil supplies have prevented prices from coming down, according to a new report from Bank of America-Merrill Lynch (BofAML).
"From the Libyan civil war to Russian-Ukraine conflict to civil unrest in Venezuela the the recent clashes in Iaq , oil producing countries around the world are struggling to grow output. On top of that, geological and engineering challengs have limited supply growth prospects in Kazakhstan. As a result our most recent medium term projection of 9.1 mn barrels per day of potential OPEC and non-OPEC supply growth over the next five years is looking overly optimistic, and we revise it down to 8 mn barrels per day," BofAML said.

In the last three years, shale revolution iN US has led to crude production exceeding 2.6 mn barrels per day in the last three years. Even in the past one year, production has increased by 1.3 mn barrels per day, largely offsetting production declines elsewhere around the world.

With crude output at 8.5 million b/d in June and liquids output at 2.7 million b/d, America has now overtaken Russia and likely even Saudi Arabia to become the world's largest oil producer (Chart 3). With geopolitics turning increasingly complex, this fast growth in US production has helped keep global Brent crude oil prices anchored at around $110/bbl in the last three years, BofAML report said.
Source: Bank of America-Merrill Lynch (BofAML)