Given the positive impact of shale production on new manufactured housing, modular and workforce housing shipments, MHProNews has been tracking for some time expert commentary on the topic. As oil’s long slide continued, the U.S. Energy Department predicted that production from U.S. shale operators will begin to decline in the second half of 2015. The Associated Press tells MHProNews that this decline would mark the first such drop in what has been a 6-year boom in U.S. onshore crude production.
The price of oil fell Tuesday, dipping briefly under $45, before ending down 18 cents to $45.89 a barrel. That’s the lowest since the spring of 2009, and a drop of 58 percent during the past six months.
Oil and gas fields in North Dakota, Texas and elsewhere have driven the enormous increase in U.S. crude oil production during the past 6 years. That rise – combined with more supplies from Iraq, Canada and elsewhere – are among the factors pulling down global oil prices.
On one side of the debate of the future of shale in the U.S., some point to lower prices encouraging drillers to delay or cancel plans for new exploration. The EIA expects a decline in onshore production in the second half of this year. Production from those fields is expected to peak at 7.4 million barrels per day in May, and fall to 7.2 million barrels per day by December. “Many oil companies have cut back on their exploration drilling in response to falling crude prices,” EIA Administrator Adam Sieminski said.
For the year, average U.S. production, including output from Alaska and the Gulf of Mexico, is still expected to rise, but by the slowest rate in four years. If oil prices rise as expected in 2016, onshore oil production should climb again, and reach 9.5 million barrels per day, the second highest ever, after 1970’s record 9.6 million barrels.
The EIA says it is a particularly tough time to predict future prices, especially in distant months. The indicators that the agency uses to forecast prices are all over the place, and that uncertainty limits its ability to predict production levels.
However, there is some evidence that does not seem to support this forecast. Shale Directories tells MHProNews that rig counts in the Marcellus and Utica Shale are steady and permitting in Ohio and Pennsylvania is consistent. Rig counts have fallen somewhat in Texas and North Dakota.
Shale Directories admits that 2015 could present some interesting times. “The falling oil prices and the stable natural gas prices in spite of frigid weather means upstream and midstream businesses could experience considerable swings in 2015.” ##
(Photo Credit: Bloomberg)
Article Submitted by Sandra Lane to – Daily Business News- MHProNews.
