No recovery in sight for US shale
Barrels may have returned to the market, but lack of drilling and bearish conditions will likely see production fall sharply across Q4
The US shale patch is primed for a steep production decline in the fourth quarter that will likely spill over into 2021, the result of a lack of drilling and increasingly wary producers. WTI again fell below $40/bl in late September on fears that a second global wave of Covid-19 infections could further stall economic recovery. Curtailed production from earlier in the year has now almost entirely returned to the market. But the sector’s recovery looks limited given hefty capex cuts, a focus on capital discipline and the lack of motivation that continuing low prices will engender. Well completions and frack spreads have plunged through 2020. “The current frack spread is at 89, down by c.7
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