Skip to comments.Crashing Oil Prices And Dropping Rig Count Take Their Toll On U.S. Output
Posted on 01/12/2016 2:36:28 PM PST by bananaman22
The EIA has just published its latest update to the Drilling Productivity Report (DPR), and soon we will get their update to the Short Term Energy Outlook. These are the two documents in which the EIA take a stab at estimating where US production is going, as opposed to where it has been.
Weakness in the Chinese economy has hung like a pall on the oil market since the turn of the year and there is nothing putting a floor under the oil price just yet, but to my eyes the decline of US shale production is now well established and that will eventually feed through into some support for the oil price.
Not that we will get an early spike in the price; if Iran and Saudi Arabia rattling scimitars across the Persian Gulf didn't get us a spike, nothing will. There is the small matter of three hundred million barrels of excess inventory to get through. But once the market sees that US shale is flagging and that supply and demand are heading back towards balance despite weakness in Chinese growth, some respite for hard pressed oil producers will come.
(Excerpt) Read more at oilprice.com ...
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