Shale fracking is one of the biggest reasons why oil production is on the rise in the United States. The increased production is putting the U.S. on the road to producing more oil than it imports. Fuel wholesalers and retailers need to understand the importance of fracking and shale, the oil that it holds, and its relation to the markets.
What is shale and why is fracking important?
Shale is a sedimentary rock formed by clay and other minerals that gathers in layers on ancient lakes, lagoons, or river deltas. Shale is a fine grained rock that tends to break into laminate layers and can be found in multiple locations around the world, including America. Shale tends to fracture into layers, trapping oil and other resources, but shale structures do not allow easy access to these resources. The fluid trapped in shale is often referred to as tight oil and is a light form of crude oil. The tight oil is perfect for refining into various gas products.
Oil trapped in shale is not easy to extract with traditional well drilling methods. The vertical shafts do not access the pockets of oil efficiently and this makes drilling operations too expensive. The optimal method for oil extraction out of shale is horizontal drilling with hydraulic fracking for well stimulation. Fracking creates fractures throughout the shale formations through which the liquid can flow freely. Fracking in shale formations is revolutionizing the oil production industry in the U.S., and around the world.
Shale’s relation to the markets
The U.S. became the world’s biggest natural gas producer in 2010, a position it still holds due to fracking. By 2020, the U.S. will start producing more than 10 million barrels a day, which will top the all time record set in November 1970. The U.S. is projected to remain on top of the markets until at least the 2030s.
The Middle East is not reacting well to the surge of American oil into the markets. Recently, Saudi Arabia has been flooding the markets with cheap crude oil, hoping to drive prices down until U.S. oil production becomes unprofitable. These actions are why gas prices started dropping in November 2014. However, there are no signs that this production via shale fracking in the U.S. is slowing down or stopping any time soon.
Lower gas prices may or may not be a long term or short term fixture of the markets. There is too much uncertainty to predict how fracking will impact the gas markets. What shale fracking has brought, however, is less dependence on foreign oil and greater security to the U.S. gas markets.
If you need wholesale fuel, contact us here at Kendrick Oil. We provide high-quality fuel products and services throughout Kansas, Oklahoma, Texas, and New Mexico. You can call us at (800) 299-3991. You can also visit online and connect with us via email by clicking on Contact Us.
