The Price Responsiveness of Shale Producers: Evidence From Micro Data

Knut Are Aastveit, Hilde C. Bjrnland () and Thomas Gundersen
Authors registered in the RePEc Author Service: Hilde Christiane Bjørnland ()

No No 05/2021, Working Papers from Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School

Abstract: Shale oil producers respond positively and significantly to favourable oil price signals. This finding is established using a novel proprietary data set consisting of more than 200,000 shale wells across ten U.S. states spanning almost two decades. We document large heterogeneity in the estimated responses across the various shale wells, suggesting that aggregation bias is an important issue for this kind of analysis. We find responses to be stronger for the largest oil producing firms, among wells that are spaced further apart and in regions where the density of shale wells is higher. The response also depend on the level of production. Our empirical results calls for new models that can account for a growing share of shale oil in the U.S., the inherent flexibility of shale extraction technology in production and the role of shale oil in transmitting oil price shocks to the U.S. economy.

Keywords: Oil price; Shale oil supply; Well-level panel data (search for similar items in EconPapers)
Pages: 31 pages
Date: 2021-09
New Economics Papers: this item is included in nep-ene and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://hdl.handle.net/11250/2777341

Related works:
Working Paper: The Price Responsiveness of Shale Producers: Evidence from Micro Data (2022)
Working Paper: The Price Responsiveness of Shale Producers: Evidence from Micro Data (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bny:wpaper:0101

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