The price of oil dropped sharply in October, causing some trepidation among America's mineral and royalty owners. Since June of this year, oil prices have been sliding, but realized the largest plunge this month, dropping by about 15%.
The reasons are directly connected to supply vs. demand. The shale oil boom, for instance, has increased the supply of oil worldwide, and demand has gone down in China, the world's second largest oil consumer. But the main reason oil prices have dropped can be traced back to OPEC, which has for all intents and purposes, allowed the price of oil to fall, by actively engaging in talks of opposing production cuts to curb their supply.
Despite the lower price of WTI crude oil, which is around $80.00, the Energy Information Administration (EIA) reported production gains across all shale fields for the month. Even though the price of oil is down, it's nowhere near the price the country experienced during the bust of the 1980s. And even though some operators are considering modifying their drilling programs in 2015, in areas like the Bakken and Eagle Ford, analysts have predicted production growth to continue through the end of the decade and beyond, in these areas.
