CALGARY (Bloomberg) --In brokering the end to the global oil-price war last month, the Trump administration assured leaders that America’s shale patch would throttle back production.
But few expected that the cuts would run this deep -- and happen so quickly.
Drillers are laying down rigs and shutting in wells at a frantic pace in response to the plunge in oil prices caused by the coronavirus pandemic. A week after West Texas Intermediate crude settled below zero for the first time ever, analysts at JPMorgan projected that the U.S. would cut output by 1.5 million barrels a day by June. Two weeks into May, production is already down by at least that much and continues to decline.
As a result, oil storage tanks that were in danger of brimming over got a break last week when inventories shrank for the first time since January. The market has noticed: WTI for June delivery rallied to near $30 a barrel on Friday, up from $10.01 when it became the prompt contract on April 21.
https://www.worldoil.com/news/2020/5/15/us-shale-s-quick-response-to-falling-oil-prices-is-paying-off
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