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Will U.S. Shale Ever Return To Its Boom Days?

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Posted By: MDConservative, 6/8/2020 10:44:50 AM

U.S. shale drillers are bringing back shut in production three months after the onset of the current downturn. But steep decline rates will increasingly take hold, dragging down overall U.S. output later this year. With oil prices approaching $40 per barrel, many drillers are covering immediate operational costs. Rystad Energy estimates that “a bit more than 300,000 bpd” of shut in U.S. oil production has come back online. A total of 1.15 million barrels per day (mb/d) was shut in in April and May, and that output will “return swiftly over July and August,” JBC Energy wrote in a note.

Comments:

OPEC is getting the pricing it needs for its purposes, which also freezes American shale production. Higher pricing means more incentive to produce. Helping are the "mountains" of inventories that need to be worked through. The real question is how quickly demand rebounds and real growth begins. That may be years off.

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Reply 1 - Posted by: synchronicity 6/8/2020 11:08:14 AM (No. 437172)
The Saudis main oil production comes from its Ghawar oil field, it has been producing for over 70 years. The Saudis don't have infinite oil and their newer oil fields have a lot of technical issues. It is also certain that they cook their production books to hide the decline of their oil fields. Some day in the not too distant future they will have to admit their oilfields are nearing the end of their productive lives and the day that happens the U.S. will become the world leader in hydrocarbon production until the age of fossil fuels comes to an end. There is a reason the Saudis have recently decided to start offering a percentage of ARAMCO to foreign companies / investors and the most logical being that they are Arab and know that the cookie jar is about empty.
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Reply 2 - Posted by: bamboozle 6/8/2020 11:52:06 AM (No. 437236)
I wonder whether fracking technology will enable the Saudis to squeeze more production out of their fields? They certainly have enough sand.
3 people like this.

Reply 3 - Posted by: envirodude 6/8/2020 12:22:53 PM (No. 437269)
There were three years of super hurricanes that went through the Gulf of Mexico. Ivan, Katrina, Rita and Ike hurt production. Combined with war in the Middle East, oil topped $150/bbl. Unless there are more super hurricanes or war in Saudi Arabia, the answer is no. Shale will never return to the boom days. Sign me, Oilfield refugee from 1988 and 2019
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Reply 4 - Posted by: Proud Texan 6/8/2020 12:59:41 PM (No. 437303)
All it takes is a couple of sunken ships in the middle east and things can change drastically. Right now China and short-sighted people here are enjoying the far-too-low prices.We like the lower price of fule of course. The chinese are really enjoying buying up even more oil fields in the U.S. They bought a lot of interest in the Eagle Ford formation in 2015 and now are getting bargains in the Permian basin among others. A little more and it will be chinese oil under our feet. They won't be so timid about pulling it out, but we won't like it much.
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Reply 5 - Posted by: Historybuff 6/8/2020 2:49:18 PM (No. 437411)
n.b. it doesn't spoil in the ground. One hickup in the middle east and we start the fracking again.
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Reply 6 - Posted by: Delilah 6/8/2020 3:05:02 PM (No. 437424)
One extremely cold winter will bring back fracking for natural gas and the price I'm hoping as I have a few shares in NG companies in my area of Ohio. Exporting more will help too as it has only begun.
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Reply 7 - Posted by: Geoman 6/8/2020 5:35:40 PM (No. 437580)
Shut-in oil and gas isn't going anywhere, so it'll be about the market prices as to when it will be produced and consumed.
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Reply 8 - Posted by: red1066 6/8/2020 9:09:50 PM (No. 437740)
Once the price hits $40 a barrel, shale will become profitable again. Remember, it wasn't all that long ago, that shale production needed the price of oil to be in the $60 range to be profitable.
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