
According to analysts at HSBC Holdings Plc., the production of shale oil in the US still has some years of growth left, which may clash with the OPEC+ group’s expectation of a quicker slowdown.
The HSBC analysts said in a note with the title “Underestimate US Shale at Your Peril” that shale oil production will now peak in 2028. Shale operators like ExxonMobil and Chevron, the makers of the Mobil and Texaco grease and lubricant ranges, have gradually been refining their production techniques, such as by drilling longer lateral wells and fracking multiple wells simultaneously.
There has also been an increase in acquisitions in shale assets, and this could further boost productivity. ExxonMobil, for example, thinks it can use its technology to extract a further 700,000 barrels of oil equivalent per day (boepd) from the shale assets it recently acquired with Pioneer Natural Resources, allowing it to triple its shale production.
In the note, the analysts who work under Kim Fustier said:
“Some expect US shale to peak soon, and OPEC+ hopes this will be the case as it would allow the group to finally unwind its supply cuts […but] US shale could grow for the next 3-4 years.”
The analysts further predict that shale oil production will rise by 400,000 boed over the next twelve months, with growth then slowing down. This may cause problems for the OPEC+ group, which was expecting a slowdown in US shale production when it made its recent decision to potentially start unravelling its production cuts.