U.S. Shale Oil Output Expected to Grow

Oil output is expected to grow in all major U.S. shale plays in November despite falling global prices as drillers become more efficient.  Production per well was projected to increase in fields in North Dakota, Texas and Colorado, the Energy Information Administration said today in its Drilling Productivity Report. Brent futures fell to $85.04 a barrel on the ICE Futures Europe Exchange, the lowest settlement since Nov. 23, 2010.

Only about 4 percent of U.S. shale oil production needs prices above $80 for drillers to break even, the International Energy Agency said today in its monthly oil market report. Producers are getting more oil per dollar spent drilling, driving costs down as much as $30 a barrel since 2012, Morgan Stanley (MS) analyst Adam Longson said in a report yesterday.

“Prices aren’t low enough to put these projects at risk,” Matthew Jurecky, head of oil and gas research for the London-based research company GlobalData Ltd., said by e-mail today from New York. “The profit margin on most commercial unconventional oil plays will support prices as low as $50, many below that even.”

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.