U.S. Shale Is Facing Higher Costs and Slowing Productivity

Despite providing most of the growth in global supply over the last decade or so, U.S. shale producers are subject to the effects of the whims of OPEC+, and Saudi Arabia in particular. Their decision to rapidly unwind previous output cuts has put over 2 mm BOPD on the market in a very short period, and resulted in a global stock build that's just knocked the stuffing out of oil prices. We've seen this movie before and it always ends up in the same place. A big "lake" of oil that takes a year or so to work off, and as traders adopt a posture that…