U.S. independent shale companies are starting to step up their spending plans, eyeing a swift return to the shale patch as oil prices rise. Many have revised their capex upward, added rigs, and hedged production forward.
Rather than focus on midstream infrastructure, environmentalists should focus their energy on reducing oil demand if they want to reduce consumption.
Why has U.S. shale production proven to be so resilient to low oil prices? There are three main reasons, and they all come down to costs.
While some companies have been able to drill profitable wells with prices at current levels and the Permian remains attractive, the U.S. oil industry is not healthy with oil under $50.
Trump threw his full support behind fracking and said that if the U.S. were to ban it, the country would be “back into the Middle East begging for oil again.”
There's a clear opportunity for new downstream capacity in North Dakota, but intensely high capital costs, oil price volatility, complex regulatory hurdles, and the uncertain outlook for shale could derail refining projects in the state.
Despite the decline of volumes on the tracks and controversies surrounding safety, crude shipped via rail is here to stay, given there isn’t currently pipeline capacity to move supplies from the prolific Bakken plays to the coasts.
After defying gravity for over a year, every American shale producer and shale play is showing signs of decline.
Can low oil prices tip the economy into a recession? Not on their own, but the fact that a key sector that was instrumental in the post-2008 economic recovery is suffering is worrisome.
While output in the Bakken has held up relatively well, it is set for a dramatic decline, making East Coast refineries further dependent on imports.