Shale Bust Sets The Stage For Oil Supercycle

Summary

• The shale boom unleashed 7.5 million barrels per day of new supply onto the market over the last decade.
• But shale producers burned through hundreds of billions of dollars achieving this growth, and also depleted their future inventories.
• Today, investors are unwilling to finance reckless production growth.
• Meanwhile, shale inventories have been depleted.
• The age of cheap shale oil is over, setting the stage for the next oil supercycle.

Snapshot of shale cash flows from 2010 - 2019

Paul Campbell/iStock via Getty Images

I can still smell the crude oil and chemical solvents…

It was 2012, and I was fresh out of college working my first "real job" in the oilfield service sector. One of our key clients was facing a big problem: persistent wax builds up within

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.