Shale Slowdown Could Trigger Major New Oil Price Rally | OilPrice.com

Shale Slowdown Could Trigger Major New Oil Price Rally | OilPrice.com:

Two weeks ago, Oilprice.com published my notes which supported my belief that U.S. oil production has “hit a wall”. Last week, EIA confirmed my conclusion. The EIA’s 941 report shows that after U.S. crude oil production peaked in April at 12,123,000 barrels of oil per day (“BOPD”) production declined 8,000 BOPD in May and another 33,000 BOPD in June. Preliminary estimates say that when actuals are available for July, they will show an even larger decline.

These are not big declines, but with the active drilling rig count continuing to fall, I feel confident in telling you that U.S. oil production over the second half of this year is not going higher. When EIA reports actual production figures for July at the end of this month, they are surely going to be lower because of the well shut-ins due to Hurricane Berry in the Gulf of Mexico. Barring another GoM hurricane, oil production should rebound a bit in August and September. However, I don’t see anything that will return U.S. oil production to the peak set in April.