MarketWatch 25 Years: MarketWatch Moments: The shale boom, passive investing and other new market forces

by | Oct 13, 2022 | Stock Market

We are marking MarketWatch’s 25th anniversary by looking at the 25 biggest financial market events and developments we have covered. In our previous installments, we noted the first 15 events MarketWatch reported on that made a big impact on financial markets. They included the rise of online brokers, the IPO boom and bust, the financial crisis and the rise of China.  Over the last decade, important new forces emerged that have impacted global markets in profound ways. Some of these developments would have seemed far-fetched when MarketWatch first started writing about money and investing.

16. The U.S. shale boom

An industrial fracking oil well.

Getty Images

In September 2013, as the U.S. started producing more oil than it imported, a MarketWatch headline declared that “U.S. oil independence isn’t just a dream.” A veteran energy trader told MarketWatch at the time that “the U.S. oil boom is only in the second inning.”  During MarketWatch’s lifespan, the U.S. transformed from a net importer of oil to an exporter, producing as much as 13 million barrels a day. The national security implications were profound and the extra production kept oil prices lower, fueling the economy and the stock market.   It was a development that few saw coming. For more than three decades, oil production in the U.S. had declined. By 2006, the 5 million barrels of oil America produced each day was nowhere near what the country needed, and the country imported more than 10 million barrels per day.  But in areas of Texas, Oklahoma and North Dakota, a group of American wildcatters started using new techniques like hydraulic fracturing and horizontal drilling to tap oil trapped in reservoir rock that seemed impossible to extract. Many big oil company executives laughed at these entrepreneurs. But as they refined their approach and oil prices rose, shale oil drilling became economical. With interest rates low, Wall Street was enticed to finance the small independent oil companies and a new industry thrived.  U.S. oil production started to increase around 2009. The stocks of shale oil companies soared on Wall Street, until a Saudi-led OPEC kept pumping oil in an attempt to kill the U.S. shale phenomenon. As oil prices fell starting in 2014, U.S. shale producers were humbled. They were no longer stock market darlings and some even filed for bankruptcy. But the U.S. shale industry endured and in 2022 the federal government projected the U.S. would produce 12 million barrels of oil daily. 17. The era of passive investing

John C. “Jack” Bogle, the late founder of the mutual fund company Vanguard Group.

Bloomberg

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