for Shale Oil Production
In the shale patch, rig productivity is falling, companies are no longer making headway on drilling times, and cash flow continues to disappoint investors.
Although oil would surpass $200 per barrel under its high-price scenario, the EIA sees little effect in curbing demand growth.
Some producers are turning more toward conventional plays, in particular older oil fields that can be tapped with new technology and provide quicker paybacks and more predictable long-term returns.
After seeing massive growth so far this decade, natural gas liquids (NGLs) are expected to rise by about 1.2 million barrels in the next five years. Despite the increase in NGLs, a key source of supply for petchems, a global oil supply gap could still form early next decade.
Small independent shale producers are dealing with a the possibility of another oil price plunge with aggressive hedging, a development that should allow output to grow.
The OPEC commission would examine whether the cartel’s behavior is designed to disadvantage U.S. oil producers and secure market power through anti-competitive behavior.
While this past weekend’s earthquake in Oklahoma will not likely bring drilling to a halt, it could usher in a new era of heightened oversight on fracking in a state that has seen increasing investment from shale companies in recent years.
Despite the DOE and others making the case for a slimmer Strategic Petroleum Reserve, the U.S. is still vulnerable to wild price swings and global supply outages.
Hedge fund sentiment in the oil markets has turned considerably bearish as of late. While it may be premature to say prices have already peaked for the year, a sustained bull run for the rest of 2016 appears less and less likely.
Like presidents before him dating back to Richard Nixon, Barack Obama pledged to reduce dependence on crude oil imports and sever the country’s reliance on OPEC oil. But unlike others, Obama saw overall energy security improve markedly during his presidency.