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Crude Oil WTI Futures - Jun 24 (CLM4)

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83.89
+0.32(+0.38%)
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Crude Oil WTI Futures Discussions

The Myth of Shale's Resilience: In January of 2010, US crude production stood at 5.4 mb/d. Propelled by the shale revolution, production in January 2015 increased to 9.3 mb/d after just 5 short years, then peaked at 9.7 mb/d by April of that year. One year later, production now stands at 8.9 mb/d. Meanwhile, Baker Hughes reported 1,482 active rigs in January of 2015. One year later that number fell to 536 rigs. As of yesterday, that number fell to just 343 rigs. Lastly, Raymond James Research's comprehensive study estimated that there were over 4,000 DUC's at the beginning of 2015. That number halved to just 2,000 by 2016. Currently, many estimate that number to be anywhere from 800 - 1,200.
OPEC would have to add at least another 2-3m b/d production just to maintain global production. All the while demand increases at (lowest estimate) 1.2m b/d. Even if Saudi and Russia stood true to their threats, we would have a balanced supply/demand in the oil market by 2017. And of course, there is no geopolitical risk at all :P
JT, no way Jose. Imports peaked at 12.5 mb/d in 2005. Expect further increases in imports as shale will fail supply their refinery customers any longer.
RD, exactly. Good stuff.
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