It is not because of decreased rig count. It is because cash flow at current oil prices is too low to complete most wells being drilled. The implications are profound. Production will decline by several hundred thousand of barrels per day before the effect of reduced rig count is fully seen.
Oil prices don’t change based on weekly rig count reports. Yet every week, there are proclamations by analysts that oil prices are poised to recover because of some change in the Baker Hughes North American rig count
Production from shale oil plays has been impressive and has taken the national energy dialogue by storm.
With the media awash in stories telling us how much oil is being discovered around the world, there is one word which the optimists quoted in these stories refuse to utter: Depletion.