Steve St. Angelo Blog | Future U.S. Oil Production Will Collapse Just As Quickly As It Increased | Talkmarkets
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Independent researcher Steve St. Angelo (SRSrocco) started to invest in precious metals in 2002.  Later on in 2008, he began researching areas of the gold and silver market that, curiously, the majority of the precious metal analyst community have left unexplored.  These areas ... more

Future U.S. Oil Production Will Collapse Just As Quickly As It Increased

Date: Wednesday, February 7, 2018 8:16 PM EDT

While U.S. oil production reached a new peak of 10.25 million barrels per day, the higher it goes, the more breathtaking will be the inevitable collapse. Thus, as the mainstream media touts the glorious new record in U.S. production that has both surpassed its previous peak in 1970 and Saudi Arabia’s current oil production, it’s a bittersweet victory.

Why? There are two critical reasons the current record level of U.S. oil production won’t last and is also, a house of cards. First of all, oil production profiles tend to be somewhat symmetrical. They rise and fall in the same manner. While this doesn’t happen in every country or every oil field, we do see similar patterns. For example, this similar trend is taking place in both Argentina and Norway:

(Click on image to enlarge)

Here we can see that oil production increased, peaked and declined in a similar pattern in both Argentina and Norway. However, many countries had their oil production impacted by wars, geopolitical events, and enhanced oil recovery techniques that have changed their production profiles. Regardless, the United States experienced a symmetrical production profile from 1930 to 2007:

(Click on image to enlarge)

As we can see in the chart, U.S. oil production from 1930 to 2007 increased and then declined in the same trend. On the other hand, the new Shale Oil Production trend is much different. Shale oil production in the United States didn’t take off until 2007. It took 23 years for U.S. oil production to double from 5 million barrels per day (mbd) in 1947 to a peak of nearly 10 mbd in 1970. However, U.S. oil production, from shale oil fields, doubled in less than ten years from 5 mbd in 2008 to over 10 mbd currently.

For those Americans or delusional individuals who believe the U.S. oil industry will be able to continue producing a record amount of oil for the next several decades, you have no idea about the financial carnage taking place in the U.S. shale oil industry. This leads me to the second reason. The U.S. Shale Industry hasn’t made any money producing oil since it started in 2008. And it’s even worse than that.Not only have they not made any money, but they have also spent a lot of investor money and tacked on a massive amount of debt in the process.

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