Oil, because US production will not spring up anytime soon
How is US oil production: facts, numbers, analyzes and scenarios
Despite the traumas the US oil industry has been through this year – from production cuts to mass layoffs to a string of bankruptcies – many producers have said they still want to prioritize production over debt relief. At least according to the latest energy survey published by the Federal Reserve Bank of Dallas.
COURSE CHANGE FOR SHALE OPERATORS
A fact that, according to Bloomberg , stands in stark contrast to the repeated assurances to investors by the executives of the shale sector who have finally received the message: and that is that after years of debt and cash 'burned' to finance constant growth, they are focusing on increasing shareholder returns and strengthening their financial balance.
WHAT THE FED QUARTERLY SURVEY SAYS ON OIL
The Dallas Fed's quarterly survey asked 108 companies at what price US oil would really create the impetus for new drilling. And based on the answers, the majority, about 43%, replied that this level should be between 51 and 55 dollars a barrel, well above the 39 dollars at which the price is currently hovering.
66% of executives surveyed even believe US manufacturing has peaked, Reuters reported.
MAINTAINING PRODUCTION MAIN OBJECTIVE BUT LESS THAN THE PAST
Not only. Given eight options as to what their main goal is over the next six months, the largest share of respondents, 19%, said they wanted to keep production stable, while 16% said they wanted to increase production and another 16% gave priority to debt relief. However, as the Dallas Fed pointed out, this is a distinct change from a 2018 survey that showed a distinct advantage for manufacturing growth.
USA AT THE TOP OF PRODUCTION AT THE BEGINNING OF THE YEAR
US production hit an all-time high of around 13 million barrels per day at the start of the year. It is now well below 11 million barrels a day after the Covid crisis which drastically cut global demand. Earlier this year, BP said the pandemic would reduce demand by 3 million barrels per day through 2025, predicting peak demand between 2019 and 2050, according to the company's energy forecast.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/petrolio-perche-la-produzione-usa-non-zampillera-a-breve/ on Sun, 27 Sep 2020 14:53:38 +0000.