We May Have Reached “Peak Shale” – Here’s Why That’s Good News!

We May Have Reached “Peak Shale” – Here’s Why That’s Good News!



Here is an outstanding article which explains the inner workings of the shale oil industry.  As the article mentions, shale oil wells produce 30% of all their oil production in the first year.  Therefore, oil companies must constantly keep drilling more wells just to stay even with their production levels or to increase production.



Now, with the low price of oil projected to stay in the $50 to $64 range for many months, this means that drilling will be cut back substantially, and less production will occur in 2015.  This will cause an increase in oil prices since we will have less oil supply.  Therefore, we should have several chances in the next year to make money on oil trades through owning an ETF like ERX or by owning oil companies like OAS, WLL, or RDS/A.  The hard part will simply be picking the bottom.