RE:Will we get back to $50.37 - Year High?I think USA production is being constrained because of the decline in "sweet spots" which characterize this type of reservoir.
When you frack a shale it has to be a fairly high "silica" content (as opposed to clay rich minerals) or the energy of the frac will not be a horizontal propogation-- but rather a vertical one.
The energy from the frac has to go somewhere so if it can't propogate in a horizontal direction then it will move in a vertical plane and "break" uphole and in the process destroy casing, coiled tubing etc. and other downhole equipment that is present.
In more extreme cases, vertical propogation will break uphole far enough to contaminate aquifers that are the source of drinking water for farmers/communities etc. This is particularly true about shallow aquifers that have low saline content--they are literally "blue gold" for the communities.
You never hear much about this type of risk from those who rage on about the "evils" of oil sand or heavy oil production which do not rely on this fracking risk.
I'm amazed that this risk is rarely discussed in the media but if you get a tailings pond where some birds have died then CNN runs it as the lead story.
And of course with the high decline rate of shale frack production/wells its like a hamster on a tread mill. You have to keep up a steady pace and eventually it grows tired and the financing regarding declining fortunes starts to decline as well. Again, this is rarely discussed even in technical journals because the fracking industry has basically been given a green light while heavy oil production is villified in the MSM.