U.S. oil production has skyrocketed this year, leaving even the most optimistic forecasts in the dust. But, the recent crash in oil prices could do what the much-hyped pipeline bottlenecks could not – slow down shale production. Between 2015 and 2017, shale drilling activity fluctuated with oil prices (though on a several-month lag), with drillers deploying rigs and adding output when prices rose, and scrapping rigs and dialing back on activity when prices dipped. Drilling and production has always fluctuated with prices, but the much shorter lead times for shale compared to conventional drilling, meant that the oil market was responding much quicker to price changes. The ebb and flow of drilling activity gave rise to the “ shale band ” theory, which dictates that oil prices had an upper and lower bound, largely decided by shale output. Whenever prices tested one of those limits, U.S. shale would steer […]