Piling the pressure on US LTO

The country’s production may struggle to return even to its pre-pandemic levels, while growing to new heights seems a distant prospect

The US light tight oil (LTO) industry has been on a heck of a ride over the past decade. Domestic crude production has more than doubled, reaching record levels and stealing substantial market share from Opec and its allies.   On the other hand, the competitive threat from rampant US supply has also triggered two oil price wars. And the economic fallout from the second of these and from the Covid-19 pandemic means it will take several years for US LTO production to match the record 9.15mn bl/d set in December 2019, before industry shut-ins and the widescale collapse in drilling activity (see Figures 1 and 2). At worst, US LTO output may have peaked. Troubled industry A wall of cash from bank