IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Can U.S. oil production survive the 20th century?

Listed author(s):
  • Russell L. Lamb
  • Chad R. Wilkerson

The plunge in world oil prices has brought further difficulties to U.S. oil production, which has been declining in recent years. At the current low prices, most domestic oil wells are not profitable. This calls into question the long-run viability of oil production in the United States. Whether oil production remains a viable part of the U.S. economy in the next century will depend on how long oil prices remain at their current low levels.> Lamb and Wilkerson show how the recent low prices for oil on world markets reflect a combination of demand and supply effects, with both short-run and long-run forces at work. For example, sluggish demand growth reflects both milder weather in some parts of the world (a short-run phenomenon) and the impacts of the Asian financial crisis, which could persist for some time. Meanwhile, supply has mushroomed, in part due to the short-run effect of Iraq's return to higher levels of oil production. In the main, however, the increase in supply reflects sharp declines in the cost of discovering and extracting oil reserves. On balance, the current low prices appear to be mainly the result of longer run demand and supply forces, suggesting that prices are likely to remain low for some time to come. If world oil prices do remain low, U.S. oil is unlikely to be competitive in world markets. Therefore, the domestic oil sector is likely to continue to lose market share for the foreseeable future.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Federal Reserve Bank of Kansas City in its journal Economic Review.

Volume (Year): (1999)
Issue (Month): Q I ()
Pages: 51-62

in new window

Handle: RePEc:fip:fedker:y:1999:i:qi:p:51-62:n:v.84no.1
Contact details of provider: Postal:
One Memorial Drive, Kansas City, MO 64198

Phone: (816) 881-2254
Web page:

More information through EDIRC

Order Information: Email:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fip:fedker:y:1999:i:qi:p:51-62:n:v.84no.1. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LDayrit)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.