The irreversible decline of US shale oil has begun
"Shale oil production in the United States is set to decline for the third month in a row to 9.39 million barrels daily, the Energy Information Administration said in its latest Drilling Productivity Report.
That would be down from 9.433 million barrels daily for August and a record-high 9.476 million bpd for July."
Although productivity has increased, it has not been enough to offset the decline:
"That said, some shale producers have recently reported higher well productivity thanks to greater drilling efficiency. This increased productivity, however, has not been enough to keep prices in check."
It may very well be that US shale will not beat the July record, because the rig count is declining, more and more as time goes by. Irina Slav writes:
"Yet the rig count has been falling for much of the year and despite a recent reversal of the decline trend, the total rig count remains 16% below the levels it was this time last year, per Baker Hughes data."
Julianne Geiger, who gives us updates on the rig count front, recently (on September 22,2023) wrote the following article:
"Oil, Gas Drilling Slows To 19-Month Low In U.S."
From this article:
"The total number of active drilling rigs in the United States fell by 11 this week, after seeing a brief 9-rig rise last week, according to new data from Baker Hughes published Friday.
It is the fewest number of active drilling rigs since February 4, 2022.
The total rig count fell to 630 this week. So far this year, Baker Hughes has estimated a loss of 149 active drilling rigs. This week’s count is 445 fewer rigs than the rig count at the beginning of 2019 prior to the pandemic.
The number of oil rigs fell by 8 this week to 507, down by 114 so far in 2023."
End quote.
This is a trend, and everything points in the direction that it will continue. The financial conditions will just get worse, economic growth is over, and this will be reflected in the oil industry.
Up until July 2023 there was a long slowdown of US shale, and now the peak is suddenly reached and is behind us. I have almost not been able to keep up. It has gone so fast.
Do you remember investment firm Goehring & Rozencwajg predicting in June 2023 that the Permian basin would peak in 2025 (see this blogpost by me in the beginning of July)? It was just before the decline of shale began in August 2023.
Now they are taken by surprise. I wait for their comments on this development.
I cannot almost believe that everything has gone so fast.
What apocalyptic times, indeed.
These are really interesting times to be alive in, and we can expect a future that is radically different from all that we have known. Because oil will never surpass the peak of November 2018, this is becoming more and more evident for every month that passes by.
I recommend that you follow the graphs on the blog Peak Oil Barrel, there you will see in more detail a confirmation of what I write here. This blog is really fateful.
Do you remember that most of the growth of global oil production since 2010 has come from the US, and that most of US growth has come from shale oil? Without this growth, the decline of global oil production will soon be fast. Yes, it will be exponential, an accelerated rate of decline. This is too much to swallow, it behoves us to meditate upon it daily, let it slowly sink in.
