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Quiet hurricane season leaves oil oversupply

A quiet Atlantic hurricane season in the Gulf of Mexico ended Monday without a storm-induced price rise to lift crude oil from its slump.

Tropical Storm Bill made landfall on Matagorda Island, Texas, on June 16. It was the only system to hit the Gulf of Mexico in 2015. Bill brought coastal flooding and gusty winds to the Texas coast at landfall, but it hardly threatened oil production in Gulf waters.

The below-average season coincided with a four-month stretch of oil prices averaging less than $50 a barrel.

The majority of U.S. production has moved onshore to shale fields.

The Gulf of Mexico accounted for 16 percent of domestic production in 2014, down from 27 percent in 2003, according to the Energy Information Administration.

In 2008, oil prices surged 44 percent after Hurricane Ike struck. Markets barely noticed four years later after Hurricane Isaac hit and halted more than 90 percent of crude output in the Gulf of Mexico.

Horizontal drilling and fracking technologies now allow producers to reach oil and gas in shale formations. As a result, shale output now accounts for more than 50 percent of U.S. production, taking the sting out of lost Gulf production.

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