RE:RE:RE:RE:RE:RE:RE:Why is CNQ going up nicely but suncor is stick in the mudThus far US rig counts have been ticking up 5-10 per week. However, lets see what 60+ WTI brings.
The EIA sees a big uptick in drilling from current levels, particularly in H2 2021 and going into 2022 according to their latest short term energy outlook update:
https://www.eia.gov/outlooks/steo/ - EIA estimates that U.S. crude oil production averaged 11.0 million b/d in January, which is down slightly from 11.1 million b/d in November (the most recent month for which historical data are available). EIA expects production will continue to decline slightly in the coming months, reaching 10.9 million b/d in June. Although oil-directed drilling has increased in the United States in recent months, the number of active drilling rigs remains lower than year-ago levels. EIA expects production from newly drilled wells will be more than offset by declining production rates at existing wells in the first half of 2021. However, based on EIA’s forecast that West Texas Intermediate crude oil prices will remain near or higher than $50/b during the forecast period, EIA expects drilling will continue to increase. As a result, production from new wells will exceed the declines from legacy wells, and overall crude oil production will increase in the second half of 2021 and in 2022. EIA estimates that U.S. crude oil production will average 11.0 million b/d in 2021—down from 11.3 million b/d in 2020 and 12.2 million b/d in 2019—and will rise to 11.5 million b/d in 2022.
That being said, time will tell...
Adonis1411 wrote: Shale will keep on ticking upward at 5-10 rigs a week but they won't be in a position to accelerate development like they have in the past. US investors in debt and equity have turned the taps off and with Sleepy Joe in the big seat, the industry will remain under the microscope. They're going to be in production maintenance mode to the best that they're able to flow cash, delever and make payouts to shareholders. Even working through their DUCs, they're not going to be able to sustain production at current levels.
OPEC+ will bring production back for sure, but not until March and, even then, I have to believe they're going to be very cautious to not get things headed back in the wrong direction again.
Lots of runway for cheap Canadian E&Ps still and the cheap oilfield services companies will be the next to run thereafter.