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PR Newswire
14-07-2015, 03:07 PM
Shale oil output heads for record drop after US drilling swoon
HOUSTON (July 14): Shale fields that powered the US energy renaissance will suffer the biggest drop in output since the boom began after companies pulled more than half their drilling rigs.
Production from the prolific tight-rock formations such as the Eagle Ford in southern Texas will decline 91,000 barrels a day in August to 5.36 million, the Energy Information Administration said Monday. It’s the fourth month in a row production is expected to slide, after more than tripling from 2007.
Output is slipping after producers from ConocoPhillips to EOG Resources Inc. reduced the number of drilling rigs in order to cut costs following a 50% drop in the price of oil. About 645 rigs were drilling for oil last week, down from 1,609 in October, according to oil-field service company Baker Hughes Inc.
“The market is largely anticipating oil production to keep declining this year and snap back to a certain extent in 2016,” Andrew Cosgrove, a Princeton-based energy analyst for Bloomberg Intelligence, said by phone Monday. Second-half declines this year will be muted, due to high-grading and efficiency gains, he said.
West Texas Intermediate crude for August delivery fell 54 cents to settle at US$52.20 a barrel Monday on the New York Mercantile Exchange. It’s down 51% from the 2014 peak of US$107.26.
“We need to see oil prices above US$60 and more toward US$65 to spur a recovery in the rig count,” Cosgrove said. “The longer it stays below US$60, the harder it’s going to be for US production to ramp back up.”
...
http://www.theedgemarkets.com/sg/article...ling-swoon
HOUSTON (July 14): Shale fields that powered the US energy renaissance will suffer the biggest drop in output since the boom began after companies pulled more than half their drilling rigs.
Production from the prolific tight-rock formations such as the Eagle Ford in southern Texas will decline 91,000 barrels a day in August to 5.36 million, the Energy Information Administration said Monday. It’s the fourth month in a row production is expected to slide, after more than tripling from 2007.
Output is slipping after producers from ConocoPhillips to EOG Resources Inc. reduced the number of drilling rigs in order to cut costs following a 50% drop in the price of oil. About 645 rigs were drilling for oil last week, down from 1,609 in October, according to oil-field service company Baker Hughes Inc.
“The market is largely anticipating oil production to keep declining this year and snap back to a certain extent in 2016,” Andrew Cosgrove, a Princeton-based energy analyst for Bloomberg Intelligence, said by phone Monday. Second-half declines this year will be muted, due to high-grading and efficiency gains, he said.
West Texas Intermediate crude for August delivery fell 54 cents to settle at US$52.20 a barrel Monday on the New York Mercantile Exchange. It’s down 51% from the 2014 peak of US$107.26.
“We need to see oil prices above US$60 and more toward US$65 to spur a recovery in the rig count,” Cosgrove said. “The longer it stays below US$60, the harder it’s going to be for US production to ramp back up.”
...
http://www.theedgemarkets.com/sg/article...ling-swoon
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