EIA 914 Mar 2023 12.7mm bbl. p/d vs Mar 2022 11.7mm bbl. p/d or a 1mm bbl. p/d increase.

As 2 former XOM executives have said higher oil prices will always bring more production than thought. Old wells are turned on or worked over and more new ones drilled. Oil from storage that was not believed to be as high came into the mkt..

The opposite happened when oil prices fell. Private producers not looking for C/F or looking at the NPV of a bbl. of oil produced choked back well and or shut them in. Oil went back into storage to be sold later. Most importantly CAPEX fell. We are at levels here where CAPEX is being questioned.

Shale oil production accounts for over 7mm bbl. of US production. When horizantal drilling moved from NG to oil from the NG plays to the Permian in 2010-11 production grew rapidly. It was drill baby drill. Oil prices were between $70+ to $110 during the boom. This led to a crash in prices in 2016-17 into the upper $30's to low $40's. Billions of $ was raised by WS to fund this boom much of it lost. What this boom did was to bring the world needed oil production. Without this 7mm bbl. p/d of production where would oil prices be? Higher prices are no longer here to fund the needed CAPEX nor are funds from WS. We see this in the falling rig & frac counts. Oil producers have stated they were going to stay to budgets at not go back to the drill baby drill days. They have followed through. As stated earlier the Biden admin. has put in 150 new regulations on oil D&C. Leasing is still very tight. We may see US production increase slightly from these levels as previously funded CAPEX is spent. Once these monies are spent and if oil prices stay at these levels we will see US production drop as was seen between Dec. 2019 and May of 2020. Oil production and CAPEX is extremely price sensitive WW. We are close to price levels that will stop new supplies.

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