Since the very beginning, the development of the US shale sector has been fitful. It has already suffered a period of zero profitability caused by low oil prices as well as economic and political crises. At the moment, the shale sector has faced obstacles spurred by political instability, the economic downturn, and some investment problems. Experts are warning about paralysis for the shale sector.
Dan Eberhart, CEO of oilfield services provider Canary, LLC, was the first one who made such a prediction. Saying that the current situation “adds up to something close to paralysis for the shale sector,” Dan Eberhart introduced a new term “paralysis”. “There are also investor and political pressures holding back shale production,” he added. What is more, some economic issues are also weighing on the sector. “The great US shale machine has hit a wall. Drilling and fracking activity has flatlined, and some shale executives are warning that US production growth may come in below expectations – perhaps by a lot,” Dan Eberhart emphasized.
“That’s bad news for oil markets that are already supply constrained,” he said. Thus, in the foreseeable future, “the oil market is set to suffer another big supply crunch, which means a spike in prices.”
