Rystad: US shale production to reach...

US shale production will peak at 14.5 million b/d around 2030, Rystad Energy forecast, saying US light, tight oil (LTO) represented less than 1% of world oil supply 9 years ago but represents close to 10% of total world oil supply in 2019.

Rystad Energy’s base-case price scenario assumes a West Texas Intermediate price of $55/bbl in 2019; $54/bbl in 2020; $54/bbl in 2021; and $57/bbl in 2022.

Even assuming a flat $45/bbl price for WTI, Rystad Energy estimates that the LTO supply still will peak in 2030 but at a more modest 11.5 million b/d, said Sonia Mlada Passos, Rystad Energy’s product manager for shale upstream analytics.

Most analysts expect the Permian basin will be the dominant part of 2040 US oil supply although some opinions vary on specific production numbers.

"In Rystad Energy’s base-case price scenario, we expect Permian’s production to grow to around 7.5 million b/d by 2040," Passos said.

"The price factor is of course one of the deciding assumptions that defines our forecast for the US [LTO] supply in the long term," Passos said. "As reflected by our base-case price scenario, we expect the oil price to increase in the long term."

In addition, strong US oil production is driven by a large inventory of wells remaining to be developed across numerous shale plays.

Rystad expects rising production in the Permian basin will be met by adequate takeaway capacity expansion because numerous pipelines are proposed but yet to be sanctioned.

"However, it should be noted that any changes in future market conditions would have an immediate impact on our shale production projections," Passos said.