Even though North American production can pick up due to current price levels, there is not a roaring U.S. shale industry to respond to OPEC+ and balance out global supply.
That’s according to Rystad Energy Oil Markets Analyst Louise Dickson, who made the statement in a comment sent to Rigzone on Monday. In the statement, Dickson noted that, after oil shot above $100 per barrel in 2014 and triggered the 2015-2016 downturn, U.S. shale sprang back almost immediately, but outlined that things would be different this time around.
“We do not anticipate U.S. oil production to return to pre-pandemic levels of 12.8 million barrels per day (in February 2020) until the end of 2023, a much more prolonged recovery driven by capital discipline from shale drillers, as well as natural base decline,” Dickson said in the statement.
In the U.S. Energy Information Administration’s (EIA) February Short Term Energy Outlook (STEO), the latest STEO at the time of writing, the EIA estimated that U.S. crude oil production averaged 11 million barrels per day in January, which it highlighted was down slightly from 11.1 million barrels per day in November. The EIA said in its February STEO that it expected production would continue to decline slightly in the coming months, reaching 10.9 million barrels per day in June.
“EIA expects production from newly drilled wells will be more than offset by declining production rates at existing wells in the first half of 2021,” the EIA stated in the February STEO.
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Andreas Exarheas, rigzone, shale oil, eia, opec+
