Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (108124)	7/5/2025 11:18:56 AM
From: isopatch	3 Recommendations Recommended By Hugh Bett kckip Mick Mørmøny Respond to of 108584

WTI crude unlikely to see mid 50s/bbl again. Why? Horizontal Shale wells decline more than twice the annual %age of conventional sandstone or carbonate (limestone) well per excerpt from my previous post. Myra Sefong is one of the best energy analysts in the world: <The difference today from say, when Russia invaded Ukraine in 2022, is the "underlying decline rate of global [oil] production," said Majcher. Oil and natural-gas supply is unique in that it comes from wells that are under pressure - and "as they produce, the rate of production declines," he said. On a historical basis, oil was produced primarily from conventional reservoirs that were assumed to decline at a global rate of about 6% on average, and projects took years from initial drilling to production, so producers didn't like to cut capital expenditures. Members of OPEC, meanwhile, were helpful in balancing a market that "would've taken longer to balance left to its own devices." The underlying rate of global production has quickened. In a report from August 2024, ExxonMobil Corp. (XOM) said global oil and natural-gas supplies would "virtually disappear without continued investment." It estimated that oil production would naturally decline at a rate of about 15% per year. In other words, with no new investment, global oil supplies would fall by more than 15 million barrels per day in the first year alone, ExxonMobil said. "Decline rates of existing fields are the biggest driver for new supply needed, and the reason significant investment is still required even before accounting for demand growth," the ExxonMobil report said. "The annual decline of existing supply is higher now, with an increasing mix of unconventional resources, such as U.S. tight oil, which decline faster than conventional oil and natural gas resources." Declines in U.S. unconventional oil production, or crude oil derived from methods other than traditional vertical drilling and pumping, is "staggering," said Majcher. The U.S. decline rate is at a pace roughly equivalent to what Canada produces on a yearly basis - at around 6 million barrels per day, he said, so the "U.S. needs to add a Canada of oil production to stay flat." That gets harder and harder over time, he said. U.S. production is likely to decline at current prices, said Majcher. "There are signs that that is currently happening." U.S. crude-oil production was at 13.44 million barrels per day for the week ended June 20, down from 13.57 million three months ago, according to the Energy Information Administration. Weekly data shows production was at a record high of 13.63 million for the week ended Dec. 6, 2024. The oil market is seeing OPEC+ adding to global supply and assuming that there is no room for these additional barrels, said Majcher. However, he believes the decline rate in global oil production will "eat up the excess supply fairly quickly to balance the market."> Message 35185803