26AUG2019 - NEWS - The Real Reason Why US Oil Production Has Peaked

One of the basic assumptions or “Paradigms” that is keeping a lid on the price of oil is the belief that U.S. oil production will continue going up year­-after-year. This paradigm is second only to the fear that the tariff war between the U.S. and China will go on for years, causing a global recession. FEAR has caused oil prices to fall back into the mid-$50s, not supply / demand fundamentals. It is important that energy sector investors know what’s going on in the real world because $55 oil is not a sustainable price for the world’s most important commodity.

In the real world, upstream oil & gas companies are slashing drilling & completion budgets and the active rig count is falling week after week. Today we aren’t completing enough new wells to offset the accelerating decline rate of existing wells.