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IEA: Shale Back on Top by 2021

by Elizabeth Alford on February 25, 2016

Falling production and plummeting rig counts signal more trouble for the oil and gas industry, but a recent report by the International Energy Agency (IEA) says that shale will be back on top by 2021.

Related:January Oil and Gas Off to a Sluggish Start

Baker Hughes reported last week that the overall U.S. rig count fell to 514 rigs, the lowest point since 1999 and closing in on the lowest number ever recorded by the company, 488 rigs.  The oil rig count has been in a free fall since oil prices began to plummet and is now down nearly 75% from October 2014 when we had 1,609 running across the country.

The shale regions in Texas have lost the most, though they continue to remain the highest producers. The Permian Basin and Eagle Ford have lost a combines 202 rigs since this time last year.

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On Monday, the International Energy Agency (IEA) predicted that U.S. shale oil production would fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017 but would likely recover in the longer term. The agency  expects improved efficiencies will help shale recover and that we may see record production again by 2021.

“It is easy for consumers to be lulled into complacency by ample stocks and low prices today, but they should heed the writing on the wall: the historic investment cuts we are seeing raise the odds of unpleasant oil-security surprises in the not-too-distant-future,” said IEA Executive Director Fatih Birol, launching the report at IHS CERAWeek.

Oil prices continue to fluctuate as U.S. benchmark settled Friday at $29.64 a barrel, the 12th trading day this year that oil settled below $30 a barrel.

Read more at iea.org

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