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US Oil Rig Count Surges By Most In 7 Months - Will Shale Show Restraint?

US Oil Rig Count Surges By Most In 7 Months - Will Shale Show Restraint?

Just as we suggested, US oil rig counts surged last week, tracking the lagged uptick in WTI prices and suggesting production's upward path will continue (after last week's weather-impacted drop).

US Oil Rig Count rose 10 to 752 last week - the most since June 2017...
 

 
The question is - as OilPrice.com's Nick Cunningham asks (and answers) - Will Shale restrain itself?

Brent recently hit $70 per barrel and WTI surpassed $64.50, and oil executives from the Middle East to Texas no doubt popped some champagne. The big question is whether or not U.S. shale will spoil the party by ramping up production to extraordinary heights, setting off another downturn.

The EIA made headlines a few days ago when it predicted that U.S. oil production would surge this year and next, topping 11 million barrels per day by the end of 2019.

But shale executives repeatedly promised their shareholders that they would be prudent this time around, eschewing a drill-no-matter-what mentality that so often led to higher levels of debt…and ultimately to lower oil prices. Shale executives repeatedly insisted in 2017 that they would not return to an aggressive drilling stance even if oil prices surged.

We will soon find out if oil in the mid-$60s can entice shale drillers to shed their caution and jump back into action in a dramatic way. For its part, Goldman Sachs seems to believe the promises from the shale industry.

Continued: https://www.zerohedge.com/news/2018-01- ... t-7-months