With more buyers from around the world requesting U.S. crude, a Houston-based price point has become necessary.
When Saudi Arabia threatens to weaponize its oil production, the U.S. cannot afford to brush off this warning by overestimating the potential of shale to cover the shortfalls.
However, it isn’t clear that newfound interest in a variety of shale plays outside of West Texas will prove durable.
The industry's ability to weather current challenges will have global implications.
With the Permian possibly falling short of expectations, the U.S. shale boom may not be the panacea to keep prices relatively low at a time OPEC is restraining supply and geopolitical risks threaten more supply disruptions.
U.S. crude exports have climbed significantly, reaching as high as 2.3 million barrels per day, but further gains will be difficult to achieve.
Shale has upended global energy markets but two questions remain unanswered: Can it be called upon to meet demand growth, and will it ever be profitable?
WoodMac sees Permian production peaking at 3.5 million barrels per day in 2021, but that forecast stands in sharp contrast to other estimates pointing to robust growth for the foreseeable future.
The potential acceleration of decline rates at some shale wells is an ominous sign that the drilling bonanza in West Texas should not be taken for granted.
There are some signs that the U.S. shale industry is bumping up against its productivity limits, which could lead to lower-than-expected output gains or rising drilling costs.