'admin' pid='65346' datel Wrote:Some (like Art Berman) say the shale boom was a ponzi scheme, an artifact of easy money and high oil prices, that there never was any free cash flow.
At the other end of the spectrum is the American Technology Solves All Problems meme.
My view, for what it's worth, is that the response time of shale production too higher prices, while faster than the mega-projects, will be two slow for shale oil to avert a damaging price spike when/if demand laps supply.
Well, as far as that Ponzi scheme goes, it has had remarkable legs.. Rigs are down by 2/3 while production has hardly budged. I agree with you that the supply reaction won't be fast enough to avert a major spike, if and when that happens. The longer we have to wait for it, the bigger it will be.
Production is down by 500,000BBLs/day in the shale. Productivity per rig has increased but costs haven't come down that much. Much of the production gains per rig is from "high grading" the best spots. The majority of the excess oil is from IRAQ wich was able to increase production by 33% this year.