At the opening day of RBN and Novi's School of Energy in Houston, speakers examined the production gains shaping U.S. oil markets and today’s supply outlook.
During a Wednesday fireside chat, Brandon Myers, Head of Research and Chairman of Novi Labs, said producers no longer respond as quickly to short-term price spikes. Pointing to price moves since the start of the Iran War, Myers said operators have limited ability to rapidly add activity because “rig and frac crew contracts are already set.”
Productivity gains over the past decade have allowed production output to keep rising even as Permian rig counts decline, Myers said. The Permian is the nation’s largest oil-producing basin and a key driver of U.S. gas growth. Faster drilling has accounted for the biggest improvements. But he said the industry’s newer buzzword trends, such as lightweight proppant, AI, and surfactants, are increasingly “higher-hanging fruit,” with efficiency gains beginning to face diminishing returns.
The same economics are at play in the outlook for the Utica, he said. Asked when development there could accelerate, Myers said it would happen “when the wet Marcellus window gets drilled up.” Just as associated gas production in the Permian helps lower the breakeven for oil, higher-value liquids in the Northeast can help support the economics of gas development, he said.
This was just one of the many topics covered on the first day of the two-day School of Energy: Fundamentals at the Thompson Hotel in Houston. Day two will cover Natural Gas markets and flow analysis, LNG developments and NGL production. Day two will also include a fireside chat with Sean Maher, Vice President of Investor Relations and Chief Economist at P66, who will discuss changes to global hydrocarbon markets.
