U.S. Shale Slashes Capex As Low Oil Prices Bite

31 Jul 2017   Shale Oil

Seven months into the OPEC production cut deal, oil prices are not higher than they were at the end of last year, as the stubborn global inventory overhang and rising U.S. output have been offsetting price gains. Now, one week into second-quarter earnings releases, U.S. shale drillers started announcing cuts in capital budgets for this year, citing lower-for-longer oil prices. After a booming drilling start to the year—encouraged by a short-lived oil price rise—some U.S. producers are now trying to show anxious investors that they will be spending within their means after the oil price recovery stumbled in the second quarter and failed to materialize, contrary to the optimistic expectations at the beginning of this year. On the one hand, the latest capex cuts are the answer to the failed oil price recovery. On the other hand, by scaling back budgets, U.S. producers are showing the market and investors […]

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