Shale Oil

Even though the EU has been taking in the majority of US crude exports this year, its long-term dependence on US crude imports has been threatened by weakening prospects for US shale industry with industry figures reporting that the sector can no longer serve as a swing producer, which was a sentiment shared by Bryan Sheffield, the former Head of Parsley Energy.

Amid calls to raise output to lower fuel prices, the US shale industry has been facing pressure from rising operating costs and maturing fields.

The Biden administration has garnered criticism for using the Strategic Petroleum Reserve (SPR) to push down oil prices and not incentivizing production to boost supply instead.

According to the EIA, production in the prolific Permian Basin in the states of New Mexico and Texas will rise by 39K b/d on the month to a record high of 5.499MM b/d in Dec.

Chief Executive Officer (CEO) Scott Sheffield of Texas-based upstream company Pioneer Natural Resources reported that production growth in the US oil industry will only reach 500K b/d this year and will be below this level next year.

Compared to the industry's previous strategy of expanding into multiple shale basins, shale producers are now looking to focus their operations on a single basin with new investments being aimed at expanding capacity in a single play, according to Wood Mackenzie.

According to the Chinese state-owned oil giant, its subsidiary Sinopec Southwest Oil & Gas Co. found an estimated 387.8B m³ in new shale gas reserves in the Jinshi 103HF exploratory well located in the Sichuan Basin.

Co-founder Amrita Sen at UK-based information services firm Energy Aspects warned that the US's shale production would reach maximum output in 2024,..

US shale producers have been emphasizing gas production recently amid the ongoing gas supply crunch in Europe due to the loss of Russian supply that is leading US producers to send volumes across the Atlantic.

As the US is expected to rely on NG as a transition fuel and is also expected to export more NG, domestic NG output is estimated to have to grow by 17B cf/d during 2023-2025, according to Wood Mackenzie's Research Director Eugene Kim.