Well oh dear, OPEC, from the WSJ:
American shale drillers have only trimmed their pumping a little, and rising oil flows from the Gulf of Mexico are propping up U.S. production. The overall output of U.S. crude fell just 0.2% in September, the most recent monthly federal data available, and is down less than 3%, to 9.3 million barrels a day, from the peak in April.
The opportunity for further productivity gains is waning, experts say, capital markets are closing and hedging contracts for most producers expire this year. These factors have led some analysts to predict that 2016 production could decline as much as 10%.
But others predict rising oil output, in part because crude production is growing in the Gulf, where companies spent billions of dollars developing megaprojects that are now starting to produce oil. Just five years after the worst offshore spill in U.S. history shut down drilling there, companies are on track to pump about 10% more crude than they did in 2014. In September, they produced almost 1.7 million barrels a day, according to the latest federal data.
Those are sunk costs now so that oil is going to be coming out at ludicrously low cash costs. The black ooze is going lower.
