Waterous argued in January on Capitol Crude that US unconventional production had peaked, and the industry's unstable financial footing set it up for massive capital flight and a prolonged downturn.
Now Waterous predicts US shale output will sink by 3 million-4 million b/d from the peak of 13 million b/d if oil prices eventually return to $55/b. He thinks sustained higher prices of at least $70/b WTI will be required to bring investors back to the US shale sector and rebuild capacity that will be lost in the next 18-24 months.
We also talked about what will differentiate the drillers that survive this crisis and the geopolitical consequences of a diminished US oil sector.
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