In my last post, I talked about how America had depressed oil prices by increasing its supply.Recall this graph which shows that the supply glut is primarily caused by increased American supply (the top pink line is America): look like American supply might wind down.
Increase in online dating statistics in america
From the 1990 to 2000, the number of rigs decreased, and oil supply followed it down.
Then, when the number of rigs jumped in 2007, oil supply also rose with it.
Note that the number of American rigs has plummeted since the start of 2015.
It is no coincidence that oil prices hit a record low in January 2015.
At these paltry prices, oil companies have less of an impetus to dig for more oil.
The break-even price for shale oil varies according to the basin (reservoir) it comes from.
A barrel from Bakken-Parshall-Sanish (proven reserves: 1 billion barrels) costs , while a barrel from Utica-Condensate (4.5 billion barrels) costs . These figures were calculated by Wood Mc Kenzie, an oil consulting firm, and can be viewed in detail here.
As the number of rigs has halved to 800, the United States will not be able to keep up its record supply.
Keep in mind that wells are running dry all the time, so less rigging will eventually mean less oil.