US Frackers Keep Adding Barrels lweb.es/f1428 9.20.2016
Nimble U.S. shale oil producers continue to show an uncanny ability to squeeze more and more crude from new wells, allowing them to do more with less as they try to weather another dip in oil prices to $40 a barrel, so they are still seeing output gains from improved well designs and fracking techniques. The pace of innovation is increasing. Pioneer Natural Resources said it was introducing its third generation of well completion techniques, called version 3.0, using even more sand and water than the super-sized volumes introduced as version 2.0 earlier in the price crash to pull more oil out of rock. For its part, Devon Energy Corp has cut costs to drill and complete new wells by 40 percent and plans to cut $1 billion in costs this year.
OEF REVIEW:Oil analysts are looking to next year for a rebound. Crude has plunged as refineries created a glut of gasoline while failing to eliminate excess supply of crude. That wrecked refining margins. Yet, global oil prices will average $57 a barrel in 2017, according to the median of at least 20 analyst estimates compiled by Bloomberg. “We’re looking at a market that’s still in a very slow process of rebalancing and we don’t think that you’ll get a sustainable deficit until the second quarter of 2017,” said Michael Hsueh. Oil companies’ capital expenditure reductions are set to reach $1 trillion by 2020 and this lack of investment “will have a big impact on global supply,” said Hans Van Cleef who forecast Brent will reach $70 next year. 
OEF REVIEW:After a long period of dwindling demand, China’s oil consumption showed first signs of stabilizing in June. Total apparent oil demand in the world’s second-largest oil consumer averaged 11.32 million barrels a day that month, up 4% from May. Beijing does not release official data on oil demand and stocks, but Platts, by adding refining output as reported by the National Bureau of Statistics, and net imports as reported by the customs department, apparent demand for gasoil of 3.39 million barrels a day in June was down 6.4% year-on-year but up from the 70-month low of 3.14 million barrels a day in May. Fuel oil demand in June dropped 31.6% year on year to 765,000 b/d, and was 10.9% lower from May levels, and apparent demand for gasoline in June recovered from May, with a 4.6% month-on-month rise to 2.81 million barrels a day, which was also 2.6% higher than the same month last year.