In recent weeks, the market has shifted its attention from cratering crude prices to the falling number of rigs operating in American oilfields. But in the coming months, the very life cycle of many of those wells may have many market watchers concerned about output and price stability, experts told CNBC.
Oil wells—whether conventional or unconventional—reach peak production soon after they yield the first drop of crude. The difference is how quickly they enter decline.
Conventional wells go through a long period of steady, flat production between peak and decline. In contrast, production falls rapidly in the first three years of unconventional wells—those in shale, sandstone and carbonates. They then enter a long phase of very low production.