Shale-Oil Producers Ready to Raise Production
Wall Street Journal: After slashing production for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices.
Last week, EOG Resources Inc. EOG, -0.08% said it would ramp up output if U.S. prices hold at recent levels, while Occidental Petroleum Corp. OXY, +0.93% boosted planned production for the year. Other drillers said they would open the taps if U.S. benchmark West Texas Intermediate CLM5, -0.88% reaches $70 a barrel. WTI settled at $60.50 Wednesday, while global benchmark Brent LCOM5, -0.13% settled at $66.81.
An increase in U.S. production, coupled with rising output by suppliers such as Russia and Brazil, could put a cap on the 40% rally in crude prices since March and even push them lower later in the year, some analysts say.
“U.S. supply could quickly rebound in response to the recent recovery in prices,” said Tom Pugh, a commodities economist at Capital Economics. “Based on the historical relationship with prices, the fall in the number of drilling rigs already looks overdone, and activity is likely to rebound over the next few months.”
Read more: http://on.mktw.net/1cXS6lW
More industry news:
- Poll – Backing for Energy Development on Public Lands, State Regulatory Control: http://bit.ly/1FmNrX4
- North Dakota Posts Surprising Jump in Oil Output in March: http://reut.rs/1K8bXMI
- Commentary – Put America Back on a Growth Path with Energy Exports: http://bit.ly/1EH74DE
- Fracking Could Unlock 140 Billion Barrels of Oil Worldwide – Report (subscription required): http://on.ft.com/1HjnIiz
- Texas LNG Export Plant Gains DOE Authorization: http://bit.ly/1A34Hy5
- Blog – New York Fracking EIS Leaves Science at the Door: http://bit.ly/1JKQm9S
By Mark Green
Originally posted May 14, 2015
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