Shale Drillers Ready to Restart Production
It was less than a month ago that U.S. oil prices dropped into the negative, but as prices start to rise some producers are ready to start drilling again.
Among those are Parsley Energy, Centennial Resource Development and Diamondback Energy.
Even though demand is still severely depressed, some producers have little choice. They have a debt to repay and oil companies say banks are tightening credit and preparing to seize assets in some situations.
The great advantage of shale drillers versus conventional field operators is that shale wells can be up and running within a week or two compared to months for conventional wells.
One problem is that the moment the oil market knows shale drillers are ramping up, prices will slide as fast as they rose and likely to be short-lived if it is premature. But with debt coming due, it's difficult to not to restart production.
DailyFX.com market economist Nicholas Cawley says "Front-month WTI oil futures will continue to be volatile until the storage problem is resolved and traders are confident that if their position expires they will be able to store oil at a reasonable price. With global economic activity unlikely to pick-up in the foreseeable future, demand for oil will remain low and the current imbalance against excessive supply will continue to cap any rally in WTI oil futures."
Data from around the world suggest a pick-up in fuel consumption as foreign countries and many U.S. States start to relax their lockdowns.
Get the full story at oilprice.com.
The oil business here in West Texas is huge and employs many workers who have been negatively impacted financially with huge shutdowns. We need to get that turned around as part of getting our Country back to work!