the Historic drop in oil prices, forcing American companies to stop drilling new wells and close the old, can lead to a drop in oil production in the U.S. by 20 percent and leave thousands of employees without work. It is reported Bloomberg, citing data from research firm IHS Markit.
the Us shale industry faces a crisis. In the near future production cuts may be approximately 1.75 million barrels per day. Operators shut the wells taken out of service every third rig fired about 51 thousand workers, reduce wages and declare themselves bankrupt, and this happens just six weeks after the start of falling prices. Pandemic coronavirus have fallen off the demand for raw materials and to completely fill the storage is only a few weeks. All these factors are forcing American companies to cut production.
the Agency characterizes the current crisis as rapid and brutal end to the shale gas revolution in the United States, despite more recent statements by Donald trump on “the American energy dominance”. Debts in the energy sector of the U.S. surged to $ 190 billion, an increase of more than $ 11 billion in less than a week. The oil company took the first five places of the top ten most indebted of troubled companies as of April 21. Analysts at Evercore ISI predicts that by the end of June the American company can remove about five million barrels per day, or about 40 percent in average daily production.
Shale wells during the first year of operation depleted 60 percent, that is why the industry is so important to drill a new one. IHS Markit forecasts a drop in US production to 10.1 million barrels per day by the end of 2020. Energy analyst at Janus Henderson, Noah Barrett believes that the collapse will be even tougher to 8.5 million in 2021 or 2022.
the April 20 oil prices American brand WTI for the first time in history fell to negative values in the background of oversupply and lack of storage facilities.
on April 22 the price of oil grades Brent and WTI rocketed at auction. At the time of publication, the price of the June futures Brent for June delivery was worth 20.49 USD. The increase compared to the closing level of the previous session was 5.6 percent, similar contracts for WTI were trading at 14.61 dollar — an increase of 20.8 percent. A sudden rise in the prices associated with the statement of the President of the United States Donald trump, who earlier in his Twitter account wrote that gave the order to the Navy to attack any Iranian vessel that is potentially a threat to the United States.
