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The U.S. Fracking Boom: Impact on Oil Prices

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Listed:
  • Manuel Frondel
  • Marco Horvath

Abstract

As of late 2008, the steady decline of U.S. crude oil production over the last decades was reversed by the increased adoption of the hydraulic fracturing (“fracking†) technology. Adapting the supply-side model proposed by Kaufmann et al. (2004) to assess OPEC’s ability to influence real oil prices, this paper investigates the effect of the increase in U.S. oil production due to fracking on world oil prices. Among our key results obtained from (dynamic) OLS estimations, there is a statistically significant negative long-run relationship between increased U.S. oil production and oil prices.

Suggested Citation

  • Manuel Frondel & Marco Horvath, 2019. "The U.S. Fracking Boom: Impact on Oil Prices," The Energy Journal, , vol. 40(4), pages 191-206, July.
    • Handle: RePEc:sae:enejou:v:40:y:2019:i:4:p:191-206
    DOI: 10.5547/01956574.40.4.mfro
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    References listed on IDEAS

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    1. Lutz Kilian, 2009. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," American Economic Review, American Economic Association, vol. 99(3), pages 1053-1069, June.
    2. Severin Borenstein & Ryan Kellogg, 2014. "The Incidence of an Oil Glut: Who Benefits from Cheap Crude Oil in the Midwest?," The Energy Journal, , vol. 35(1), pages 15-34, January.
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