Do oil prices really matter to US shale oil production?

Abstract

ABSTRACTThe main contribution of this paper is to provide the answer to the question of whether changes in crude oil prices really matter to US shale oil production over the past decades. This study takes specific account of the asymmetric effects of oil prices, using an autoregressive distributed lag (ARDL) cointegration approach. It was found that oil price indeed has an asymmetric effect on shale production in the short run, i.e., US shale production is more responsive to an increase in oil price than to its decrease. However, it is found that the asymmetric short-run effects do not seem to be persistent in the long run.