04-16-2015, 10:24 PM
The shale oil boom that pushed U.S. crude production to the highest level in four decades is grinding to a halt. Output from the prolific tight-rock formations, such as North Dakota’s Bakken shale, will decline 57,000 bopd in May, the Energy Information Administration said Monday. It’s the first time the agency has forecast a drop in output since it began issuing a monthly drilling productivity report in 2013.
Shale oil boom seen ending in May following price collapse: EIA
The rapid and aggressive response by oil and gas companies to low oil prices has stabilized the sector. According to Wood Mackenzie, the price required for companies to be cash flow neutral in 2015 has dropped by over $20/bbl to $72/bbl. The Edinburgh-based consultancy believes further cuts would be required to achieve cash flow neutrality if oil prices remain around current levels. For some companies, this will mean selling assets, others may suspend or limit dividend and buyback programs.
Cash flow breakevens down by $20, but low prices will need deeper cuts: Wood Mackenzie
A court in Japan has dealt a blow to plans by the prime minister, Shinzo Abe, to relaunch nuclear power generation four years after the Fukushima meltdown by halting the restart of two reactors over safety concerns.
“We’re going off an inevitable cliff” because of the shrinking rig counts, Carl Larry, head of oil and gas for Frost & Sullivan LP, said by phone from Houston on Monday. “The question is how fast is the decline going to go. If it’s fast, if it’s steep, there could be a big jump in the market.”
Shale Oil Boom Could End in May After Price Collapse - Bloomberg Business