Rystad's most detailed oil supply-side analysis so far -- over 60,000 global oil fields modelled/analyzed.
Here is our summary:
- 1) Service sector cannibalising plant and once prices pick up, all service costs will ramp up significantly and largely negate the price move
- 2) Shale is in the midst of its mature mid-term cycle of evolution now, the maximum yoy growth shale can produce, even at $120/bbl, is +700,000 bpd
- 3) $30 is the lower bound of the shale industry now - anything lower is a unfeasible for all producers
- 4) In 4Q 2016 they foresee a draw of close to 1.5mmbd
Really, it is everything we have concluded, but they have not extrapolated out to 2019.
Also, no one seems to have joined the dots by asking - if shale maximum is 700,000 bpd where on earth are you going to find the other 3.5-4.5 mill bdp by 2020 to meet demand?
I bumped into an old friend today -- a very experienced global head of crude trading -- who said, 'it's 1999 all over again'.