U.S. Oil Production
Posted: Tue Jun 23, 2015 2:25 pm
I am updating our profile on Plains All American Pipeline today. This MLP keeps a very close eye on what is happening in oilfields all over North America. In their recent presentation (which you can download from their website), PAA estimates that U.S. oil production went on decline in June and will fall by 500,000 barrels per day by year-end.
I believe that is a conservative estimate. I believe the rate of decline will accelerate in the 4th quarter.
Keep in mind that the upstream companies will not increase their drilling budgets until next year AND only after they are convinced higher oil & gas prices are here to stay for awhile. It will take a massive drilling effort to reverse the decline.
There is one very good slide in the PAA presentation. It points out that if all drilling in the U.S. stopped, our production would decline by 2,200,000 barrels per day within 12 months.
I believe that is a conservative estimate. I believe the rate of decline will accelerate in the 4th quarter.
Keep in mind that the upstream companies will not increase their drilling budgets until next year AND only after they are convinced higher oil & gas prices are here to stay for awhile. It will take a massive drilling effort to reverse the decline.
There is one very good slide in the PAA presentation. It points out that if all drilling in the U.S. stopped, our production would decline by 2,200,000 barrels per day within 12 months.