US shale oil production isn't going down, even as oil price plunged earlier this decade:
![[Image: 47965133_14897233293872_rId8.png]](https://static.seekingalpha.com/uploads/2017/3/47965133_14897233293872_rId8.png)
US oil production has already bounced back to the 1970s peak, and is slated to double from there, due to improvements in technology which have brought costs way down, a key aspect that doomers somehow just can't seem to grasp.
![[Image: 47965133_14897233293872_rId7.png]](https://static.seekingalpha.com/uploads/2017/3/47965133_14897233293872_rId7.png)
![[Image: 47965133_14897233293872_rId9.png]](https://static.seekingalpha.com/uploads/2017/3/47965133_14897233293872_rId9.png)
https://seekingalpha.com/article/4056188...march-2017
![[Image: 47965133_14897233293872_rId8.png]](https://static.seekingalpha.com/uploads/2017/3/47965133_14897233293872_rId8.png)
US oil production has already bounced back to the 1970s peak, and is slated to double from there, due to improvements in technology which have brought costs way down, a key aspect that doomers somehow just can't seem to grasp.
![[Image: 47965133_14897233293872_rId7.png]](https://static.seekingalpha.com/uploads/2017/3/47965133_14897233293872_rId7.png)
![[Image: 47965133_14897233293872_rId9.png]](https://static.seekingalpha.com/uploads/2017/3/47965133_14897233293872_rId9.png)
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The shale oil sector is also better equipped than before to face both a rise in capital spending and a potential sub-$55/bbl oil price scenario. As can be expected, cashflow generation in the U.S. oil industry declined significantly in 2014-16.
By Q3 2016 however, based on the financial results of 50 shale operators constituting 60% of shale oil production, the sector became free cash flow (FCF) neutral for the first time in its history. The achievement is remarkable as the industry was not in this position even with oil above $100/bbl in 2012-2014. Any increase above the $50/bbl level will allow significant increases in FCF-financed, as opposed to debt-financed, capital spending. In other words, the sector will be able to expand oil production without damaging its balance sheet, therefore in a more sustainable manner. And even if prices remain at $50/bbl, the fact that capital spending is still significantly lower today than at the peaks of 2014 means that the industry can continue producing at the current rate and still break even.
https://seekingalpha.com/article/4056188...march-2017
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