U.S. Shale and Fracking

[Osama + 248]

This was an interesting article. However, I was not able to completely understand it. Help me out:

 

https://oilprice.com/Energy/Energy-General/Trouble-In-Paradise-For-US-Frackers.html

 

@William Edwards, @Tom Kirkman, @ATK, @Dan Warnick.

Edited January 28, 2019 by Osama
Had to tag more people

[Tom Kirkman + 8,860]

1 hour ago, Osama said:

This was an interesting article. However, I was not able to completely understand it. Help me out:

https://oilprice.com/Energy/Energy-General/Trouble-In-Paradise-For-US-Frackers.html

You need to point out what parts you don't understand.  Otherwise, I can't help you much to understand an article written by someone else.

[Osama + 248]

22 hours ago, Tom Kirkman said:

You need to point out what parts you don't understand.  Otherwise, I can't help you much to understand an article written by someone else.

"Figure 3 offers a second, more concerning presentation of the data. This graph compares U.S. production to days of oil hedged. Note first that only around one hundred and thirty days of production were hedged where the data begin. By mid-2011, almost four hundred days of production were hedged. The volume then declined, and the drop was followed by the major production decrease from these fields. Coverage peaked again at three hundred days in May 2018 and then fell to two hundred and forty-five days at the end of the year."

 

I cannot paste the image...

 

Also, is he trying to say that as hedge funds have dropped so producers might slow down their production? But this should result in an increase in prices...then why the conclusion:

"In sum, the shutdown of the energy-focused hedge funds could have a very real and important impact on activity in the oil patch. Another downturn similar to that of 2015 and 2016 could be coming."

 

Is the downturn referring to low oil production.

 

I don't know why my processor (mind) is slowing down from past few days.