U.S. Shale Output to Further Erode Even as Oil Surges, BNEF Says
- Producers focused on debt reduction and dividends over growth
- Output may shrink by another 485,000 barrels a day by end-2021
Crude oil storage tanks outside Midland, Texas.
Photographer: Matthew Busch/BloombergThis article is for subscribers only.
U.S. shale oil production is set to decline through at least 2022 as explorers resist the temptation to start drilling again despite a rally in crude prices, according to a BloombergNEF analysis.
As most drillers continue to focus on paying down debt and returning capital to shareholders instead of pursuing growth, production in the five major U.S. oil shale plays may shrink another 485,000 barrels a day by the end of this year, finishing December with 7.1 million barrels a day, BNEF analyst Tai Liu said in a note to clients on Tuesday. Output may further erode to 6.95 million barrels a day next year based on BNEF’s production models.