Reuters Friday (September 15) wrote that US crude oil long-term contract price in 2018 has risen back above $ 50 a barrel, enough to keep drilling in the next two months stable.
If the current price rally continues, the shale oil business will almost certainly start it as a booster signal to start expanding the drilling program again.
| Sodium selenite |
Facts have proved that shale oil drilling is very sensitive to changes in US crude oil prices, especially long-term prices, shale oil companies rely on long-term prices to hedge production and reduce risk.
From February 2016 to January 2017, long-term price increases gradually encouraged shale oil producers to hire additional rigs to increase production.
It is usually 16-20 weeks to respond to changes in oil prices, and production will take 5-6 weeks to react.
By January 2017, the number of active rigs increased rapidly, suggesting that production would increase significantly, possibly leading to excess market.
According to the US Energy Information Association (EIA) forecast, crude oil and condensate production increased by more than 50 million barrels per day in 2017, with an estimated increase of nearly 100 million barrels per day in 2018.
According to Baker Hughes, an oilfield services company, the number of rigs in July has been flattened and has been declining since August.
| Stannous Sulphate |
Many shale oil companies announced in August for investors in the second quarter results conference call announced cuts in capital spending and drilling plans in the second half of 2017.
It is widely believed that shale oil companies are bracing to ease concerns about over-production and falling prices.
But since the end of June since the beginning of July calendar date once again rise, indicating that we are worried about over-production is fading.
On average, the guaranteed price for the US shale oil industry appears to be around $ 50, and the price has been confirmed as a watershed in the expansion and contraction of industry activity.
The calendar has recently climbed to the top of the threshold, the current report of 51 US dollars, the highest in May to the highest.
If the forward price can be maintained at the current level, the number of US active rigs will be steady, supporting the US next year, shiny oil production growth.
| Bacillus thuringiensis |