April 18, 2018 – The Wall Street Journal
Is the U.S. Shale Boom Choking on Growth?
Permian basin, America’s fastest-growing oil field, is hitting its limits
By Alison Sider and Bradley Olson
The oil field at the heart of the U.S. shale boom is hitting the limits of its growth faster than anticipated, a surprise with big ramifications for energy profits and global markets.
The Permian basin of West Texas and New Mexico has been one of the few growth engines for oil production world-wide. The region’s output is on track to single-handedly rival that of Iran or Iraq and has lifted American production to all-time highs…
Read the full article here: https://www.wsj.com/articles/is-the-u-s-shale-boom-choking-on-growth-1524056400
… Pipeline capacity is emerging as a problem. Oil is starting to back up in West Texas and has recently sold at a $6 to $9 discount to crude prices elsewhere in the U.S. That is a warning sign that some oil might have to travel by more expensive ways like trucks to market and that producers could be forced to take drastic measures like halt drilling.
The natural gas gushing from wells also threatens to overwhelm pipelines. Some producers face the prospect of shutting wells.
“We are beginning to hear that shut-ins are becoming a very real nightmare for some producers,” John Zanner, an analyst at RBN Energy LLC, wrote in a recent note.
