• 4 minutes Why Trump will win the wall fight
  • 9 minutes Climate Change: A Summer of Storms and Smog Is Coming
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 17 hours is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 6 hours Ayn Rand Was Right
  • 4 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 6 hours Oil imports by countries
  • 8 hours Sanctions or Support: Despite Sanctions, Iran's Oil Exports Rise In Early 2019
  • 5 hours Solar and Wind Will Not "Save" the Climate
  • 4 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 3 hours AI Will Eliminate Call Center Jobs
  • 3 hours NZ Oil, Gas Ban Could Cost $30 Bln
  • 20 hours Regular Gas dropped to $2.21 per gallon today
Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

Ignore The Hype: Oil Is Rangebound

Oil

Investors can be forgiven if they are more puzzled than ever regarding the trajectory of oil prices. The gyrations over the past month have induced a sense of deep despair, followed by a brief period of optimism, only for those hopes to be quickly dashed. With oil edging back up towards $50 again, there are likely fewer people than last month who are willing to buy into the notion that the rally is for real.

A dose of skepticism, in this market, is healthy. Some analysts predict prices will plunge well below $40 while others see them steadily rising to $60 or $70, but there is a much greater probability that oil stays stuck in its current range.

Here’s why.

The extraordinarily rapid rise of U.S. shale production sputtered in June, even as the industry still appears to be expanding. The EIA reported one week’s worth of production declines, while the rig count contracted a bit before rebounding again. The data could be noise…but it could also be a sign that some of the weaker shale players are beginning to struggle with oil prices at $45 and below.

“If oil holds under $45, that would make a difference to us,” James Mayer, CEO of Green Century Resources, a small Texas shale driller, told the Houston Chronicle. Green Century might cancel or delay drilling plans if oil prices remain in the mid-$40s or below.

The same could be true for dozens of other companies. That means that if oil prices stay in the mid-$40s, or fall…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin



Oilprice - The No. 1 Source for Oil & Energy News