Oil: This is what slows the growth of US extractions.

Those who hoped that oil extraction from the US "Shale" in the short term was disappointed. The bottlenecks of supply chains. From the workforce to the sand, to the equipment they are holding back rapid growth in American oil production, even as the White House has called on US producers to increase production.

In reality, production is actually growing, but not at a fast enough pace to compensate for global supply losses from the Russian crisis. Not even $ 120 a barrel of oil can push shale oil producers towards rapid growth in production. It is not a question of missing capital, but of objective and tangible shortcomings.

Hence, US oil production, while growing, will not be able to compensate for an expected decline in Russian oil exports as purchases of this product fell 26%.

Rising US oil production is one option for bridging the global supply gap, "but it won't be fast," wrote Claudio Galimberti, Senior Vice President of Oil Markets, Head of Americas Research at Rystad earlier this month. Energy.

“Any substantial change is unlikely in the country's current growth profile in 2022, even in a context of extremely high oil prices. US oil production will approach pre-pandemic levels growing by around 900,000 barrels per day from December 2021 to December 2022, ″ added Galimberti.

The real growth in US production could be in 2023 if oil prices remain well above $ 100 a barrel. According to Rystad, US production could increase by up to 2 million barrels per day, far exceeding the pre-pandemic peak of 12.9 million barrels per day. The record of 13 million barrels could be reached, however still insufficient to replace Russian supplies.

In reality, a little bit of everything is missing. The sand needed in fracking is scarce, but there is also a lack of skilled labor. Investments in the sector are always medium-term. For example ConocoPhillips has decided today to engage more in production, but the quantitative result will take a year.

In short, the US will not solve the problem in the short term and the White House cannot point the accusing finger at the producers. Miracles cannot be done.

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The article Oil: this is what slows the growth of US extractions. comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-ecco-cosa-rallenta-la-crescita-delle-estrazioni-usa/ on Thu, 31 Mar 2022 07:00:11 +0000.