The Discussion Papers series presents results from ongoing research projects and other research and analysis by SSB staff, intended for international journals or books. The views and conclusions in this document are those of the author(s). 

The empirical section presents a vector error correction model for U.S. LTO production. Both models allow for simultaneous modeling of U.S. LTO supply and rig activity. A one percent shock to the oil price is estimated to increase LTO supply and rig activity with 0.3 and 0.8 percent, respectively. A one percent increase in rig activity leads to a 1.7 percent increase in oil production, but also a 0.1 percent increase in costs.