In this week’s Off The Cuff podcast, Chris and Art Berman discuss:
- US oil consumption is down ~15%, a good proxy of GDP shrinkage
- Why US oil production will be dramatically lower by next June
- Why the US may never produce as much oil as it did between 2016-2019
- Why oil, not interest rates, will be the limiter of economic growth going forward
For many years on this website we’ve warned of the coming crisis of “Peak Cheap Oil”. We may now be entering a new, accelerating stage of that story.
Petroleum geologist Art Berman returns to the program to explain why he predicts US oil production will be materially lower by next June, and why it will likely never return to its 2016-2019 highs:
The US rig count is at 150 right now and I just told you we need three times that to be where the American economy wants to be.
If all of the producers decided that tomorrow morning they are all going to get as many rigs as they can, it will be at least a year or more before the impact will be felt in oil markets — which means that we’re screwed.
Looking at the correlation between where we are and where it is declining to, the Untied States will be in my estimation at about 4 or 5 million barrels a day of production by June of next year — United States total crude and condensate output will be less than 5 million barrels a day by June or July of 2021.
by travissidelinger