Supply will be curtailed by lower world oil price but a reduction in drilling from the Eagle Ford will probably not be part of it.
According to a Citi Bank report Eagle Ford east and west are both producable down to about $40/barrel. The Canadian tar sands and some of the Permian stop being econimical to drill at $50 or so. Supply will be reduced eventually and the market balanced.
Yes, it is "producible" at that price, but exploration will pretty much stop. They will produce the wells already in production, but with oil at $40 per barrel, even the major oil companies balk at paying in excess of $6 million to bring a new well online.
Major oil companies that are/were pushing 20 drilling rigs around the Eagle Ford, drilling one well after another will be reduced to only drilling the minimum requirements of the lease in order to keep their lease holdings intact until the OPEC folks let up. OPEC can't keep it up forever, and our guys know that.
But, in the meantime, a very good barometer would be looking at the rig count numbers for comparisons.
