• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 5 hours Science: Only correct if it fits the popular narrative
  • 54 mins Crazy Stories From Round The World
  • 2 days EU has already lost the Trump vs. EU Trade War
  • 17 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 24 hours Do The World's Energy Policies Make Sense?
  • 1 day China's Renewables Boom Hits the Wall
  • 8 hours Iran Burning: Shock Gas Price Hike Triggers Violent Protests After Subsidy Cuts
  • 4 hours Impeachment Nonsense
  • 1 day Forget out-of-date 'dirty oil' smear, Alberta moving to be world's cleanest oil industry
  • 8 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 2 days Water, Trump, and Israel’s National Security
  • 2 days Tesla Launches Faster Third Generation Supercharger
  • 17 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"

Breaking News:

Russia Plans To Boost Crude Oil Exports

Iran Announces The Biggest Oil Discovery Of 2019

Iran Announces The Biggest Oil Discovery Of 2019

Iranian President Rouhani announced a…

U.S. Shale Production To Double Despite Struggles

U.S. Shale Production To Double Despite Struggles

U.S. shale is facing plenty…

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
Download on the App Store Get it on Google Play