{"id":41768,"date":"2018-12-18T07:44:27","date_gmt":"2018-12-18T12:44:27","guid":{"rendered":"https:\/\/olduvai.ca\/?p=41768"},"modified":"2018-12-18T07:44:27","modified_gmt":"2018-12-18T12:44:27","slug":"shale-under-pressure-as-oil-falls-below-50","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=41768","title":{"rendered":"Shale Under Pressure As Oil Falls Below $50"},"content":{"rendered":"

Shale Under Pressure As Oil Falls Below $50<\/a><\/h3>\n
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The OPEC+ cuts still are not doing very much to boost oil prices, dashing hopes for many U.S. shale producers. With companies in the process of formulating their budgets for 2019, the prospect of $50 oil sticking around raises questions about the heady production figures expected from the shale patch.<\/p>\n

The IEA expects U.S. oil production to grow by 1.3 million barrels per day (mb\/d) in 2019. But oil prices could significantly impact those projections. \u201cTotal U.S. shale oil growth is highly sensitive to WTI prices in the $40-60 range,\u201d Morgan Stanley wrote in a December 13 note. The investment bank said that shale producers are growing more sensitive to prices below $60 but less sensitive to price spikes above $60. \u201cIf WTI remains around current levels (~$50\/bbl), US growth should start to slow.\u201d<\/p>\n

The investment bank said that larger companies, such as ConocoPhillips or Occidental Petroleum, are less sensitive to price swings than smaller E&Ps. On the other hand, some companies could begin to slow production if prices linger at low levels. Morgan Stanley pointed to Apache Corp., Murphy Oil, Newfield Exploration, Oasis Petroleum, Whiting Petroleum and Chesapeake Energy. \u201cWith low oil prices, we see these companies slowing production growth in 2019 to spend within cash flow (or minimize outspend), [free cash flow] levels fall or turn negative, and leverage metrics move higher.\u201d<\/p>\n

Other analysts also see price sensitivity from the shale sector. \u201cWe expect 5-10% capex growth on average at $59 WTI, which should yield production growth of nearly 1.3mn b\/d,\u201d Bank of America Merrill Lynch wrote in a note. \u201cHowever producers may budget for lower oil prices given the recent decline in prices and increase in uncertainty.\u201d<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Shale Under Pressure As Oil Falls Below $50 The OPEC+ cuts still are not doing very much to boost oil prices, dashing hopes for many U.S. shale producers. With companies in the process of formulating their budgets for 2019, the prospect of $50 oil sticking around raises questions about the heady production figures expected from […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[416,433,6010,592,23083,595,17834,600,723,846],"class_list":["post-41768","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-iea","tag-international-energy-agency","tag-nick-cunningham","tag-oil-price","tag-oil-price-com","tag-oil-production","tag-oil-production-cuts","tag-opec","tag-shale-oil","tag-us-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41768"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41768\/revisions"}],"predecessor-version":[{"id":41769,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41768\/revisions\/41769"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}