Surprisingly to many (and dismayingly to OPEC), they haven’t shut down shale production. Many wells are more profitable at low prices than many predicted.
Dave O’Neill used to scoff at me when I said that $100/barrel oil was an unsustainable price. Of course, he used to stupidly scoff at a lot of things.
In general, companies have an amazing ability to adapt to changing market conditions. Something often ignored by those who hate the free market.
The shale boom didn’t just produce oil, but lots of gas. It’s not just price per barrel, but CCF (more like MMCF).
A very interesing thing about fracking is that it’s more like manufacturing than it is like conventional oil production. In the latter, large capital investments in fields pay back over a long period (decades in some cases). With fracking, on the other hand, the production is more front loaded, so the payback is mostly over a shorter period. Additional capital investment can then yield another output pulse, and so on.
What this means is that production from fracking can adjust more rapidly to changes in oil prices than conventional oil can. This will tend to limit how much, and for how long, oil prices can diverge from equilibrium. We may have seen our last oil shock.
I am from N.D. and at last count almost 1000 wells are getting but on hold because of the falling prices. I know a lot of people who have been laid off out west.
http://bakken.com/news/id/243236/in-downturn-north-dakotas-oilfield-firms-jostle-for-tiniest-of-jobs/