• 4 minutes Why Trump Is Right to Re-Open the Economy
  • 7 minutes Did Trump start the oil price war?
  • 11 minutes Covid-19 logarithmic growth
  • 15 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 18 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 8 hours Dr. Fauci is over rated.
  • 44 mins TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 3 hours China extracts record amount of natural gas from Gas Hydrates in South China Sea
  • 6 hours Western Canadian Select selling for $6.48 bbl. Enbridge charges between $7 to $9 bbl to ship to the GOM refineries.
  • 19 hours Dept of Energy ditches plans to buy Crude Oil for SPR
  • 41 mins Where's the storage?
  • 3 hours Hillary Clinton tweeted a sick Covid joke just to attack Trump
  • 5 hours Oxford Epidemiologist: Here’s Why That Covid-19 Doomsday Model Is Likely Way Off
  • 20 hours Wastewater Infrastructure Needs
  • 1 day Analysis into the Iran Outbreak
  • 20 hours >>The falling of the Persian Gulf oil empires is near <<
Oil Majors Are Preparing For $10 Oil

Oil Majors Are Preparing For $10 Oil

As oil prices continue to…

Yergin: Expects U.S. Oil Output Will Jump By 500,000 Bpd

Oil Production

Daniel Yergin, the oil analyst vet, told CNBC he expected U.S. crude oil production to increase by more than half a million barrels this year, revising an earlier forecast from December, when he saw the increase at between 300,000 and 500,000 barrels per day.

The forecast is based on oil prices staying within the current US$50-55 band, Yergin said. The higher prices have allowed shale producers to increase production indeed, but now drillers and frackers are starting to raise their prices, after suffering a more severe blow from the oil price crash than E&Ps and being forced to sell their services at discount.

Yergin cited improved efficiency as the driver behind the production growth that he expects to see this year, and it may very well be the case that further improving efficiency will become a key concern for E&Ps as a way to offset the higher quotes service providers are offering: some drillers and frackers are asking double what they were asking for their services two months ago.

This could curb the upward potential of production growth, but to what extent is still unclear. At the same time, further dampening optimism, OPEC’s assurances that the production cut is going according to plans have failed to push up prices above US$55 for longer than a few days.

Related: Oil Prices Head Higher On Positive Demand Outlook

Yesterday, another analyst, the managing director of BK Asset Management, warned that oil prices are in a very vulnerable place and the longer they stay within the US$50-55 range, the more likely they are to eventually start declining, rather than rising. Boris Schlossberg told CNBC that if WTI drops to US$50 from the current US$52, the further move downwards will become much more likely than it is now.

Should this happen, E&Ps in the shale patch will need to really start thinking fast to balance growing production costs and falling prices.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News