Posted on 03/29/2021 12:54:06 AM PDT by nickcarraway
The United States shale industry’s era of “newfound prudence” could be coming to an end. After a devastating 2020 for U.S. oil, the mood in the shale sector has been historically reserved, with drillers focused on balancing their books and getting into the black before overextending with new exploration. This is out of the ordinary for the sector, as the boom and bust cycle of oil markets has long been an accepted and unavoidable part of the oil industry. “The oil industry is predictably cyclical: When oil prices climb, producers race to drill — until the world is swimming in petroleum and prices fall. Then, energy companies that overextended themselves tumble into bankruptcy,” The New York Times sets the scene. “That wash-rinse-repeat cycle has played out repeatedly over the last century, three times in the last 14 years alone. But, at least for the moment, oil and gas companies are not following those old stage directions.”
After the West Texas Intermediate crude benchmark crashed to nearly $40 below zero on April 20th last year, stoked by pandemic fears, a drop in oil demand, and an ensuing oil price war between Saudi Arabia and Russia, many Permian Basin shale companies found themselves bankrupted overnight. But since then, oil prices have rebounded impressively, in no small part thanks to drillers in the U.S. and abroad staying strong on their output curbing commitments.
It’s even been speculated that, under these conditions along with a loosening of pandemic-based travel restrictions, we could be seeing $4 gas at the pumps this summer. But the era of sitting tight and allowing for a risk-averse return to the “new normal” could soon be coming to a close.
(Excerpt) Read more at oilprice.com ...
Celebrating $4 a gallon gas. Silly me, I thought cancelling the keystone was a bow to the Saudis.. how many oil interests based in bidens home state.
Warren Buffett list $10billion last year speculating on oil and feared the price would remain cheap for several years. Investors get the government they pay for.
lost
Deferring exploration costs with the gains from high prices. Shed the taxes crude prices nicely.
I’m skeptical this administration is going to allow significant increases in shale production no matter what the price of oil gets to.
At the end of the day, they want to hurt the American consumer and help Russia & Iran. Domestic shale exploration doesn’t help that goal, at all.
No.
With too much oil, there is no need to increase capacity by more drilling
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