Oil shale refers to any rock that contains solid bituminous material. Oil shale formation was done millions of year ago by deposition of plants & flesh on lake beds, through years heat and pressure transform these derbies to oil but due to the lack of enough heat and pressure the transformation was not completed, so this kind of oil is solid. Oil shale must first be mined and then heated to a high temperature the resultant liquid then will be separated and collected. The process of producing this kind of oil is complex and expensive.
Recent data shows that new well production in U.S has increased, it is mostly because the new technology that reduces the cost of extraction. (See below table). New generation of shale technology helps oil companies to be profitable with the low prices of oil market, this data means that U.S Shale oil producers still intensify the supply to market. To have a better sense comparison of production of new wells with old ones is suitable, so as seen in the New well oil production per rig diagrams old wells production has shown decrease.
By this condition, U.S oil fields continue to produce in the current oil prices (nearly 40$), Iran’s oil will be steeped to the world market. Saudi Arabia do not decrease its production capacity to defeat Iran. At a glance the supply would increase to market.
Slow economic growth of china reinforce the concerns of oil demand. But the big news this month is that the banks granted over-leveraged, loss making shale oil drillers a stay of execution by continuing to provide credit lines. So with the force of banks still U.S oil companies continue to produce oil shale, on the other hand Russia, Saudi Arabia and international oil companies are all losing billions and look set to continue doing so throughout 2016, as the oversupply now looks set to continue until early 2017.