A new report from IHS Markit says U.S. shale production – the chief source of rapid growth that has made the U.S. the world’s largest oil producer – is slowing. The outlook for 2019-21 forecasts U.S. total production growth to be 440,000 b/d in 2020 before flattening in 2021 and resuming modest growth in 2022. But those volumes are in stark contrast to the boom levels of recent years. Raoul LeBlanc, vice president at IHS Markit, said, “Going from nearly 2 million b/d annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers.”
IHS Markit expects capital spending for onshore drilling and completions to decline by 10 percent to $102 billion this year, another 12 percent to $90 billion in 2020 and another 8 percent to $83 billion in 2021. But the report said the industry retains the ability to grow rapidly under the right conditions. “There is certainly ample inventory of high-quality wells out there,” LeBlanc said. “Now the trajectory of production depends almost entirely on the oil price.”