‘’U.S. Rig Count Must Drop 150 For Oil Markets To Balance’’

7 Jul 2017   Shale Oil, USA

Analysts and investors have been growing increasingly concerned that the OPEC-led production cuts would not be enough to bring the oil market back to balance, and now one investment bank, Morgan Stanley, is saying that if the market stands any chance of rebalancing next year, U.S. shale possibly needs to drop around 150 rigs. “If OPEC doesn’t balance the market, the oil price will have to force it somewhere else, most likely in U.S. shale. For a chance of a balanced market in 2018, the U.S. rig count can no longer grow and possibly needs to contract ~150 rigs. Given current break-evens, this requires WTI between $46-50,” Morgan Stanley analysts said in a research report on Thursday, as quoted by MarketWatch . According to Morgan Stanley, despite OPEC’s cuts, global inventory levels are currently around the same high as they were last year. “To support prices in the mid-$50s, […]

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