(Bloomberg) — The U.S.’s biggest oil field may be about to pump the brakes if crude keeps plunging.
Just 10 weeks ago, the Permian Basin was on course to grow almost 1 million barrels a day by the end of 2019, potentially surpassing Iraq, OPEC’s second-largest producer. Now, it may not grow at all, removing a large chunk of expected production from global oil markets.
Shale is highly sensitive even to small changes in prices and the Permian is not immune. With West Texas Intermediate oil at $70 a barrel, the basin would likely produce 4.9 million barrels a day by end of next year, but at $40, output will likely stagnate at around 4 million barrels a day, according to Oslo-based consultancy Rystad Energy.
The U.S. benchmark dipped below $46 in New York on Tuesday, down almost 40 percent from early October. In Midland, the heart of the Permian, prices were even worse, touching $38.99 a barrel, the lowest since the depths of the 2016 crash.
“We’ll definitely see some companies next year revisit their activity plans versus what they initially had in mind,” said Artem Abramov, vice president of shale analysis at Rystad.
Read more at : https://www.investing.com/news/commodities-news/permians-growth-spurt-at-risk-of-being-stunted-by-oil-collapse-1726027
