HOUSTON — For the better part of the last century, crude oil prices have swung like a pendulum, pushing and pulling the fortunes of nations. More often than not, global supplies of the volatile commodity were controlled by the rulers of desert domains who would otherwise have been powerless had it not been for the oil that bubbled beneath their thrones.
That pendulum is on the move again, sending the price of oil cascading to less than $45 this winter from more than $100 a barrel last June, and it may fall further in the months ahead. On the surface, this latest oil boom gone bust may feel like history repeating itself, but there is a vital difference this time: The center of the oil world has spun from the sands of Saudi Arabia to the shale oil fields of Texas and North Dakota, a giant new oil patch some wildcatters have begun to call “Cowboyistan.”
Put another way, the United States is overtaking the Organization of the Petroleum Exporting Countries as the vital global swing producer that determines prices. That remarkable change has been building since 2008, as American shale fields accounted for roughly half of the world’s oil production growth while American petroleum output nearly doubled. And shale production methods have proven highly adaptable to market conditions.
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