Shale growth in the United States is projected to reach only 500,000 barrels per day (bpd) by 2023. A variety of factors have led to a slowdown in output, such as labor shortages, lack of external capital, increases in drilling costs and exhaustion of sweet spots.
Analysts now believe that OPEC holds increased control over global oil markets due to the reduced rate at which U.S. shale patches are able to increase production. In 2020, peak output for the U.S was 1 million bpd annually; this year’s growth rate is expected to be at least half of this figure due to the impact from coronavirus and other economic constraints.
The primary contributors lowering shale growth include restrictions on available funds and high interest rates, a decrease in well productivity over time, and an underwhelming return on investments for wells located outside prime spots. However, some analysts still predict a steady but slow-paced rise in production from US shales moving forward despite these obstacles; most of this upturn is not expected to come from the Permian Basin region though as it can no longer be seen as a swing producer since financial constraints have been forced upon producers here making them unable or unwilling to invest heavily when prices rise.
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