Millions of speculators can attest to the oil drillers: the market never moves the way you need it to move, especially when you need it the most. From Irina Slav at oilprice.com:
With West Texas Intermediate falling below $45 a barrel after the latest burst in coronavirus panic, U.S. shale oil and gas producers are feeling growing heat. Except for the Permian, where production of both oil and gas is still growing, the U.S. shale patch is retrenching. And the Permian may soon follow suit.
In its latest Drilling Productivity Report, released earlier this month, the Energy Information Administration said oil production had declined across six of the seven major shale plays in the country, by some 21,000 bpd. In the Permian, however, production rose by 39,000 bpd, tipping the total into a net increase of 18,000 bpd. Now, while this confirms the star status of the Permian, it also suggests that oil production growth is becoming uneconomical in other shale plays.
A recent report on oil and gas production trends in 2019 showed the slowdown is not a sudden one. Titled “Rockies and Bakken in Focus”, the report, by Enverus, says growth in production in these regions had slowed to a crawl amid the low oil prices. Pipeline constraints, the oil and gas info provider noted, were also stifling production growth.
