Finland Times

"This is a rebalancing of the global market, and I think that many decision makers outside and even inside of North America did not anticipate how strong this shale revolution could be," said Daniel Yergin,vice chairman of information consultancy IHS.

The shale revolution that happened in the United States, the world's largest oil consumer, was very significant and it had a big impact on markets, said Yerin, who is also the Pulitzer Prize-winning author of "The Prize: The Epic Quest for Oil, Money and Power".

Now, the rapid-drilling shale oil producers in some U.S. states boosted the world's supply growth in recent years, he was quoted as saying by the website of local newspaper The Houston Chronicle.

Yergin did not think it is possible for the Organization of Petroleum Exporting Countries (OPEC) and Russia to reduce production as shale oil has changed the industry.  

If the organization cuts production, it couldn't support prices for long, he said, noting higher-cost shale drillers would soak up any market share left behind.

The oil market's oversupply would remain in place, but it wouldn't get worse, he said, adding that Iran has proved the stumbling block to such an arrangement.8   However, Yergin doubted Iran's ability to put 300,000 or 500,000 additional barrels a day into the market.

The world economic growth is another element to affect the oil market. IHS believes the world economy could have "another substandard year" this year.

"If we have decent global growth ...you'll see the rebalancing of the market will happen in the second half of 2016 or 2017 and under those circumstances you could see prices in the 40 dollars to 50 dollars range later in the year," Yergin said.

Both the U.S. oil and Brent crude shed over 3 percent after the U.S. government data showed a rise in U.S. crude stockpiles.

The West Texas Intermediate for March delivery settled at 29.64 dollars a barrel in New York, while Brent crude for April delivery close at 33.01 dollars a barrel in London.