As global oil prices fell from more than $100 a barrel in July of 2014 to less than $30 a barrel in January of 2016, industry observers expected to see a precipitous drop in U.S. shale oil production. At the time, these forecasts seemed sensible. Shale wells were definitely not the cheapest source of new crude oil production.
In fact, the break-even costs for North American shale producers were thought to be about three times higher than for similar costs for Middle Eastern producers. Shale wells also deplete faster than conventional wells, with production rates falling about 70% after the first year.
