ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Entertainment and Media»
  • Television & TV Shows

Oil Drilling Slows as Crude Price Drops

Updated on February 11, 2015

The U.S. oil boom is slowing down as drillers cut back in response to lower crude prices, according to new data set to be released on Wednesday.

uary across the continental U.S. than they did last June, before oil prices started falling from more than $100 a barrel to about $50 today, according to the study by Rice University’s Baker Institute for Public Policy.

But the amount of new crude they can pump from wells drilled in January totals an estimated 515,000 barrels a day, only 8.5% less than from the wells drilled in June, according to data provided for the study by DrillingInfo, an analytics firm.

Energy mavens around the world are watching for any sign that American oil companies are pumping less crude as a glut of petroleum has sent global prices plunging by about 50% since June. Rising U.S. production from shale fields has been a big contributor to the glut, along with tepid demand for oil in economies around the world.

The new data suggest that U.S. shale producers are responding faster to the drop in prices than energy companies have in the past, which could translate into lower production and hasten a recovery in crude prices. Shale wells roar into life and then decline more quickly than conventional wells.

Source

“You’ve got this nimble new mode of production that can enter the market and exit the market quickly,” said Jim Krane, an energy fellow at Rice University and lead author of the study. In contrast to previous oil busts, he adds, “now you have a supplier that is price-sensitive and can curtail supply quickly.”

The report is based on new onshore wells drilled in most states in the continental U.S., provided by DrillingInfo, and on drilling rigs tracked by Baker Hughes Inc., an oil-field services company. The DrillingInfo data include wells that have been drilled but aren’t necessarily pumping oil yet; the firm estimates how much oil the wells can tap based on the average peak production of similar wells drilled nearby.

The findings echo similar points made by two analyses earlier this week. The U.S. Energy Information Administration found that oil production is increasing at a slower rate in four big producing regions of the U.S.; the agency estimates that U.S. producers pumped about 9.2 million barrels a day in January. The International Energy Agency similarly projected slower growth in U.S. production as a result of lower prices.

The U.S. oil price fell $2.84, to $50.02 a barrel on Tuesday, but remains 12.5% higher than its lowest point this year.

The retreat in drilling isn’t uniform across the U.S., and it is still difficult to determine where the cutbacks will be the harshest. In some drilling hotbeds, like the Eagle Ford Shale of South Texas, the number of new oil wells actually increased during the months when oil prices fell most steeply, from November to January, according to the Rice study.

The Permian Basin, in West Texas and New Mexico, posted the sharpest decline in new oil wells, adding 15.6% less production capacity in January than in June.

Most of the decline appeared to come from conventional, vertical wells, and not the ones that bore horizontally through the rock and deliver the biggest volumes of oil and gas.

The Bakken formation, which has made North Dakota the second-largest oil-producing state after Texas, also experienced a downturn in new wells. But both the Bakken and the Permian are often impacted by severe winter weather that causes a slowdown. DrillingInfo’s data goes back to March 2014, not long enough to compare current drilling levels with a year ago.

Write to Daniel Gilbert at daniel.gilbert@wsj.com

Source

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)