CERAWEEK: US oil output could be less volatile as majors boost shale share

U.S. oil production could become less responsive to crude prices as major oil companies increase their market share of the oil pumped from the nation's shale fields, currently dominated by smaller independent producers, International Energy Agency officials said at an industry summit on Monday.

Forecasts by oil majors Exxon Mobil Corp and Chevron Corp last week for strong production growth in the Permian Basin, the nation's largest oil field, are indicative of a shift in U.S. shale output to the world's oil majors, which could mean more stable U.S. output, said Toril Bosoni, a senior analyst at Paris-based IEA.

"These major companies have longer-term strategic plans," Bosoni said at the CERAWEEK conference in Houston. "Their balance sheets mean they can continue to invest even if prices fall, for a short period of time."

The two biggest U.S. oil companies last week boasted about their prowess in shale to lure investors to their side, releasing dueling projections that, if realized, would cement the rivals as the dominant players with one-third of Permian production potentially under their control within five years.

The United States is now the world's largest producer of crude oil, thanks to the boom in shale, with record output of more than 12 million barrels per day, according to U.S. Energy Department figures. U.S. production has risen by about 2 million bpd in the last year alone.

Over the past few years, U.S. crude production, led by independent producers, has been sensitive to rising and falling oil prices, climbing rapidly when the domestic benchmark hovered above $100 a barrel in 2013 and 2014, and falling sharply when prices collapsed thereafter. (Reporting by Collin Eaton Editing by Marguerita Choy)

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