U.S. Shale Could Peak In 2024: Energy Aspects

U.S. crude oil output from shale basins could peak in 2024, a new note from Energy Aspect’s Amrita Sen cautioned.

The note referenced five crude oil producers in the United States that are considering cutting rigs at the start of the year due to inflation. The news comes as the United States shows signs of desperation for alleviating high gasoline prices at the pump by releasing millions and millions of barrels of crude oil from the Strategic Petroleum Reserve and by attempting—and failing–to strongarm OPEC+ into keeping production steady. Those steps are in lieu of ramping up its crude oil production.

The Energy Information Administration (EIA) has estimated that U.S. crude oil production in the seven most prolific shale basins will increase by 132,000 bpd from the September levels of 8.983 million bpd, according to the latest Drilling Productivity Report published mid-September. All eyes will be on the EIA’s latest version of the report, which will be released on Monday.

Not so long ago, the United States enjoyed serving as the swing producer in the global oil markets, able to match, step-by-step, OPEC’s production cuts through increases in its own production. But the United States has struggled to boost production this year, after seeing significant declines during the pandemic.

So far this year, the United States has managed to increase its total crude oil production by 200,000 bpd, with the White House moving to release more than a hundred million barrels of crude oil from the Strategic Petroleum Reserve to plug the gap left by the United States’ inability to boost production.

Should U.S. shale peak in 2024, it will be in the exact same position that OPEC+ feared getting itself into: a position where it is unable to respond to the needs of the market.

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