Forecasting can be a risky business. A barrel of oil will cost this. Worldwide production will be that. Then some drones hit half of Saudi Arabia’s production facilities, and the forecasts get blown up, as well.
Forecasting is not quite so risky when you are projecting out a decade or more. And that’s what a report by Rystad Energy, a Norwegian research firm, did. Rystad sees U.S. shale-oil production peaking around 2030, but growing by more than 81 percent from now until then.
Rystad predicts U.S. shale-oil production hitting roughly 14.5 million barrels per day (Mmbpd), well up from the 8 Mmbpd today.
The Norwegian researchers estimate West Texas Intermediate oil prices staying near $55 per barrel for the next few years.
In the past decade, crude oil coming from shale basins/plays such as the Permian has grown from not contributing much to an upstream Godzilla, reshaping the industry and the oil market, according to Rystad.
U.S. Light Tight Oil (LTO) represented less than 1 percent of global oil supply in 2010. In 2019, U.S. LTO represented nearly 10 percent of all worldwide oil supply. That percentage is predicted to increase.
“Under our base-case price scenario, U.S. LTO supply should reach its peak at approximately 14.5 Mmbpd around 2030,” says Sonia Mladá Passos, a product manager on Rystad Energy’s shale upstream analytics team.
The report came during a slowing growth in the U.S. energy sector, including spending cuts, layoffs and the working drilling-rig count falling 11 consecutive weeks and 21 of the last 23 weeks.
Nonetheless, Rystad sees the U.S. being the leader in global production growth for many years with gains in technology, efficiency and ample shale acreage yet to be drilled as new pipelines and export terminals come online.
The still-booming Permian Basin in West Texas and New Mexico will be the leaders in oil production growth spiking from 4.4 million barrels a day today, to about 7.5 Mmbpd.
The U.S. is currently producing some 12.4 Mmbpd to lead the world, but that includes output from the Gulf of Mexico, Alaska and other more mature, conventional oil production.
Assuming a flat $45 per barrel (bbl) WTI scenario, Rystad estimates LTO supply would once again peak in 2030, but at a more modest 11.5 Mmbpd.