The consequences of saturated oil storage on US production

Goehring & Rozencwajg give a gloomy forecast on US oil production:

"According to the EIA weekly inventory figures, US production has fallen by nearly 1 mm b/d or 7% in only five weeks – the second-sharpest decline in US production ever outside of hurricane-related activity.

Most of these “involuntary” cuts will never come back online. In some cases, shutting in a well for a prolonged period will irreparably damage the wellbore or reservoir. The stripper wells meanwhile were only marginally economic to begin with on an operating basis and would never justify the capital cost to drill through the cement plugs used to cap them. While offshore production is accustomed to shutting in production for short periods during hurricanes, longer-term curtailment requires the well to be permanently sealed making re-entry nearly impossible."

You can read the rest of the piece via the below link:

http://blog.gorozen.com/blog/oil-production-cuts-and-their-long-lasting-repercussions