• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 2 days Even Shell Agrees with Climate Change!
  • 8 days America should go after China but it should be done in a wise way.
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 7 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

The Texas Shale Patch Is Considering The Unthinkable

Following the 2014 Thanksgiving massacre, Saudi Arabia effectively broke up OPEC to try to kill the US shale sector by overproducing oil and sending prices plunging. It failed largely thanks to the extreme generosity of "yield-starved" junk bond buyers.

Six years later, and another, far more harrowing price war later which dragged the price of oil to nearly two-decade lows, Saudi Arabia appears to have finally won.

Texas regulators are considering curtailing oil production in America’s largest oil-producing state, "something they haven’t done in decades", the WSJ reports citing sources. Additionally, the report goes on to note that several oil executives have reached out to members of the Texas Railroad Commission, which regulates the industry, requesting relief following the oil-price crash. In other words, oil is joining every other US industry (including movie theaters) in seeking a bailout.

Texas, along with New Mexico, hasn't limited oil production since the 1970s and is the home of the Permian Basin, America's most productive oil field and the epicenter of the shale revolution which started 12 years ago and has made America into the world's top oil producer, with roughly 13mmb/d in output. It has also become Saudi Arabia's top global competitor.

Texas was an inconvenience for the Organization of the Petroleum Exporting Countries, which has sought to control world-wide oil prices in recent decades. OPEC effectively disintegrated last weekend when Saudi Arabia announced it would maximize output, boosting production to as much as 13mmb/d, unleashing panic among higher-cost OPEC oil producers.

It is unclear whether regulators will ultimately act to curtail production, but staffers are examining what would be required in such an event.

By Zerohedge.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Rob Norman on March 23 2020 said:
    It’s impossible to get any definitive information on the statistics and numbers around what is happening to the global economy.
    Sites like this one offer conflicting numbers in consecutive articles. Eg; one article says US shale can keep producing at under $30 a barrel whilst another says they need way more, around $70, to break even. It matters a lot whether either is right or its another number in between. One more example; China consumes 10 mbpd, another says $13 mbpd. Now that’s an important difference.
    I thought this website would arty least be consistent but its impossible to get any reliable figures!!!!! What does this say to readers in the current uncertainty???
    I believe we are going to see countries going bust before long. How can oil suppliers continue to pump out oil at huge losses? How can countries print ever more larger amounts of money to support economies that are falling off a cliff?
  • david Bennett on March 20 2020 said:
    In this climate, its far from unthinkable. Either the producers curtail in 2020 or they wont have to worry about it next year, they wont be around. It's that simple.
  • Leo Kobrinsky on March 20 2020 said:
    "Texas regulators are considering curtailing oil production in America’s largest oil-producing state" - could somebody explain what is it for?

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News