Enverus, an analytics firm, says that US shale costs will rise to $95/bbl in the mid-2030s.

Energy analytics firm Enverus stated on Tuesday that the marginal cost of producing U.S. shales oil could rise as much as 15 dollars a barrelle to $95 per barrel within 10 years as stagnant production forces companies to drill at locations with less proven resources.

Enverus reported that the average cost of producing a barrel in the United States is $70. According to a Dallas Federal Reserve survey, many producers need oil prices above $65 per barrel to make a profit. However, prices have been below this level all year.

Alex Ljubojevic is a director of Enverus Intelligence, an Enverus unit. He said that as the U.S. shale inventory depletes, it will lead to a new phase of increased costs and more complicated development.

Ljubojevic continued, "This shift is going to reshape cost curves and redefine investment strategy across the continent." Due to the lower oil prices and largest consolidation in a century, the U.S. Oil industry has laid off thousands of employees and cut billions of dollars in spending. A plateau or decline in production would weaken the United States' influence on global markets, and could challenge President Donald Trump's agenda of energy dominance for the United States. North America's dominance is declining in terms of supplying the global growth in oil demand. In the next 10 years, the contribution of North America to global oil demand growth will fall below 50%. This is a dramatic contrast from the last decade when the country supplied more than 100 percent," Ljubojevic said. (Reporting and editing by Marguerita Chôy in Houston)

(source: Reuters)