The Organization of Petroleum Exporting Countries (OPEC) believes that the “golden age” of shale oil production has ended in the United States, and this despite the increase in production volumes. The cartel is confident that in 2020, the growth in the production of “black gold” from shales in the US will slow down and will not soon exceed the indicators of 2018, and possibly fall even more. This was informed by the public American company Bloomberg - one of the leading agencies providing financial information in the world.
Bloomberg notes that in September 2019, US oil production reached almost 17,5 million barrels per day, which is 1,3 million barrels per day more than it was at that time in 2018. At the same time, the agency clarifies that shale oil production in the United States will increase at the beginning of 2020, but then will gradually begin to decline, as predicted by OPEC.
Bloomberg emphasizes that oil traders and company executives do not agree with these forecasts. So, according to the forecasts of Vitol Group, one of the largest traders in the world, oil production in the United States for the year (December 2019-2020) will increase by 0,7 million barrels per day. At the same time, for the previous period (December 2018-2019), production growth amounted to 1,1 million barrels per day).
For example, Vitol Group Executive Director Russell Hardy believes that in the current quarter (October - December 2019), total US oil production will increase significantly. According to him, in the first half of 2020, additional volumes of oil from countries outside the OPEC (Norway, Brazil and Guyana) will also appear on the world market.
Bloomberg notes that many small companies in the United States are experiencing difficulties and claim cost reductions. At the same time, the agency predicts that large players such as ExxonMobil and Royal Dutch Shell, on the contrary, will increase production in the states of Texas and New Mexico.
Moreover, OPEC estimates demonstrate that if member countries of the organization continue to produce as much as in the previous months (about 30 million barrels per day), then 200 thousand barrels per day of oil will reach the world market more than it will be needed in 2020. Excess production will be in the first half of 2020. Then, to prevent the buildup of oil reserves will have to produce less than 29 million barrels per day.
Bloomberg explains that the biggest problem for OPEC will not be a reduction in shale oil production in the United States, but an increase in production in Norway, Brazil and Guyana, which will increase throughout 2020.
We remind you that the term “shale revolution” appeared in 2012, when active use began Technology oil and gas production from shale formations. The total volume of gas produced in 2016 in the USA (including shale gas) amounted to 751 billion cubic meters. In the fall of 2018, the United States reached the highest level of shale oil production - 6,2 million barrels per day.