Oil production in North Dakota, one of the states at the heart of the shale boom, fell to just 1.15 million bpd in December 2015, down almost 6 percent from the all-time high of 1.23 million bpd in December 2014 (see Figure 3).
"Oil price weakness is now anticipated to last into at least the third quarter of this year and is the main reason for the continued slowdown," according to the chief of the state's Department of Mineral Resources (see Figure 4).
In the meantime, however, the market remains severely oversupplied. Global inventories of crude and refined products have climbed by 1 billion barrels according to the International Energy Agency (IEA).
The precise scale of the stock build is disputed but there is no doubt inventories have climbed substantially as a result of the supply-demand imbalance.
In the United States alone, for which there is high-quality data, stocks of crude and products have risen by more than 300 million barrels over the last two years, or 220 million since prices started sliding.
The EIA currently projects global oil inventories will continue increasing by 1.0 million bpd in 2016 and 0.3 million bpd in 2017.
The market is not expected to rebalance until the second half of 2017, after 14 quarters of inventory builds, according to the EIA ("Crude oil prices expected to remain relatively low through 2016 and 2017," EIA, January 2016).
For its part, the Paris-based IEA predicts global stocks will increase by 2.0 million bpd in the first quarter of 2016, 1.5 million bpd in the second, and 0.3 million bpd on average in the third and fourth ("Oil Market Report," IEA, February 2016).
Figure 4
.png)