Welcome to the Permanent (For Now) Oil Glut

Almost buried in this Zero Hedge post on our oil glut is this bit from a press release from shale producer Devon Energy:

We expect to sustain operational momentum in 2015 with the significant improvements we have seen in our completion designs and a capital program focused on development drilling. With strong results from our enhanced completions and a focus on core development areas, we expect growth in oil production to be between 20 and 25 percent in 2015, even with a projected reduction of approximately 20 percent in E&P capital spending compared to 2014.

As ZH notes, “despite slashing the capital expenditure budget by 20%, the company’s oil production in 2015 would grow 20% to 25%.”

Imagine if something happened to your kitchen sink that when you turn the knob to the right, the water flow increases. But when you turn the knob the other way, the water flow… still increases.