On Tuesday, Saudi Arabia, the world’s biggest oil exporter, said it would voluntarily reduce its production by one million barrels per day (bpd) in February and March, after Russia pushed to increase output, worried about US shale capitalising on the group’s cuts. (File pic shows the Opec logo at its HQ - Reuters)
HOUSTON: A decision by the Organisation of the Petroleum Exporting Countries (Opec) and allied countries to cut crude production through March delivered a late Christmas present for United States shale firms that have slashed costs, but any rise in prices spurred by the unexpected move may be just a modest stocking stuffer.
US crude oil production has fallen two million barrels per day in the last year, as low prices and demand forced shale producers to cut their losses. Investors had already been pressuring the industry to curb spending and boost returns before the pandemic hit. Shale output was quickly cut, but might return quickly if prices keep rising.
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