RIYADH: The US shale production is expected to rise further in the coming months, as producers successfully reduced their debt burdens to pre-pandemic levels following healthy cashflows driven by higher oil prices, says a report.
According to the report released by Al Rajhi Capital, cash per barrel of oil required to ensure free cash flow for shale companies increased from $23 per barrel in first quarter of 2021 to $34 a barrel in Q1 of 2022.
The report, however, admitted that Europe’s decision to partially ban Russian oil may offset the incremental supply from OPEC+ and US shale to some extent.
The report said that the Organization for Economic Co-operation and Development inventory level has reached 7.4 percent in May 2022 after touching a low of 7.1 percent in December 2021.
“Going forward, rising OPEC+ production, a likely recovery in US shale production, and a possible slowdown in oil demand may increase the inventory levels gradually,” the report said.