Brent crude rose to a three-year high of $70 a barrel last week, but there are questions about the rally’s resilience as higher oil prices threaten to unleash a new wave of U.S. shale output.

“The higher the prices go, the harder shale producers pump,” Tamas Varga at London-based broker PVM, said. He added, an “overdue correction could be under way.”

Oil prices have been rising since late June, supported by supply cuts led by OPEC producers and allies outside of the cartel such as Russia, which helped to curb excess stockpiles.

Brent, the international oil benchmark, on Jan.11 hit the highest level since December 2014, spurring concern that higher prices will attract increased US shale production, undermining efforts by global producers to cut supplies and triggering renewed pressure on prices.

Already have an account? Log In

Thanks for reading Hart Energy.

Subscribe now to get unmatched coverage of the oil and gas industry’s entire landscape.

Get Access