The U.S. shale revolution has reached its conclusion, with minimal production gains anticipated moving forward, according to Wil VanLoh, CEO of Quantum Energy Partners. He stated, “The U.S. shale revolution has run its course,” highlighting that investors now demand significant returns on cash flow from oil and gas companies.
Addressing the promises of presidential candidates to lower gas prices, VanLoh emphasized that prices are determined by supply and demand, asserting, “I don’t think the U.S. can really do that.” He noted that investor expectations for increased dividends and share buybacks contribute to the predicted slowdown in supply growth. Over the past 15 years, U.S. oil production has tripled, and natural gas production has doubled, establishing the nation as the world’s leading producer of both resources. However, VanLoh remarked, “There’s not a lot of gas left in the tank,” suggesting that further substantial production increases are unlikely.
This sentiment is echoed by industry experts, including Scott Sheffield, former CEO of Pioneer Natural Resources. Sheffield warned last year of a slowdown in shale production growth due to inventory depletion and tighter capital discipline. Interestingly, last year’s shale output surprised many with an unexpected increase of 1 million barrels per day, primarily attributed to advancements in extraction technology.
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