HOUSTON, May 29, 2015 /PRNewswire/ -- Dan K.
Eberhart, the CEO of Canary, LLC, the largest privately held
oilfield services company in the US, has announced a US shale
energy recovery and a turning point in shale's role to help
stabilize world oil prices.
"Energy economic indicators are positive," Eberhart said.
"Not only have Brent prices increased about 40% from last year's
lows, but recent rig counts have also shown a significant
"flattening" of the downward count. In horizontal oil rig
activity, we're seeing an uptick to positive activity after the
six-month fall the industry took when oil prices crashed."
Oil rig data from Baker Hughes today shows a loss of 13 US rigs.
While that number is higher than last week's loss of only one rig,
the overall trend during the last 24 weeks has been a slowing rate
of decline. On May 1, for
instance, the US oil rig count had fallen by 24, following losses
of 31 and 26 rigs during the prior two weeks. Goldman Sachs,
meanwhile, has reported that the horizontal oil rig count has
increased by four.
"With the price of oil bottoming out in January, the US shale
production peaking in April, and the rig count stabilizing, the
industry is on the way back," Eberhart said. "With Brent
hovering around $63 a barrel and West
Texas Intermediate at $60, the
industry will reignite because of continuous investment in
innovations that have allowed us to pump out light, tight oil for
20 percent less than we did just a few years ago."
The US shale industry is also moving rapidly into the role of
worldwide "swing producer," supplanting OPEC by delivering more
crude to the market as prices increase, and also putting a cap on
production to stabilize prices when Saudi
Arabia, the putative leader of OPEC, refuses to do so.
"The OPEC house of cards is unstable," Eberhart observed.
"OPEC nations are bickering among themselves as Saudi Arabia faces growing domestic insecurity
and questions about its role as the cartel leader. Saudi Arabia simply doesn't trust the rest of
OPEC's production mix."
Last November, when the Saudis refused to cut OPEC oil
production despite growing inventories and plummeting world prices,
the aim was to knock out the US shale industry while shoring up
OPEC's eroding market share.
"It didn't work," Eberhart said. "Between 2007 and 2015,
OPEC's global share actually declined from 37 percent to
just 31 percent. Meanwhile, global demand for oil grew by 6.6
million barrels per day over the same time period."
In next week's run-up to OPEC's semiannual meeting in
Vienna, the Saudis are likely to
continue ramping up oil exports.
OPEC is targeting China and
other Asian nations as a replacement for eroding business in North
America. "The sheiks are vowing once again to reclaim OPEC's
world market share by keeping production quotas high while other
members of the cartel – among them Iran, Iraq,
beleaguered Venezuela and
Nigeria – are clamoring for
production cuts to raise prices," Eberhart said.
"The Saudi strategy is backfiring, hurting the economies of
other important members of the OPEC alliance," Eberhart said.
"On the other hand, the US shale industry is here to stay.
Our willingness to adapt to changing markets and prices has allowed
us to grab the swing producer's throne. No Saudi games will
change that fact."
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SOURCE Canary, LLC