HOUSTON (Bloomberg) --A historic crash in crude prices is driving
U.S. shale into full-on retreat with operators halting new drilling and
shutting in old wells, moves that could cut output by 20% for the
world’s biggest producer of oil.
For shale companies, the price of West Texas Intermediate crude went
from hunker-down-and-ride-it-out mode to crisis mode in just a few days,
with many now unsure whether there will even be a market for their oil.
Some 1.75 million barrels a day is at immediate risk of shutting down
while the number of new wells being brought online is forecast to plunge
almost 90% by the end of the year, according to IHS Markit Ltd.
In short, it’s a swift and brutal end to the shale revolution, which
only last year had President Donald Trump proclaiming “American Energy
Dominance.”
West Texas Intermediate crude prices turned negative for the first
time in history on Monday, meaning at one point sellers had to pay
buyers to take it away. Then, the financial squeeze on the May contract
spilled over to June and into the wider market, with prices now trading
around $10 a barrel, well below the daily pumping cost in large swaths
of America’s oil industry.
https://www.worldoil.com//news/2020/4/22/oil-rout-looks-to-break-shale-s-global-oil-dominance
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