Ramping up oil production would help lower prices. But US producers won’t fill that gap

Like many industries in the course of the pandemic, oil producers are combating a shortage of workers. They’re additionally having bother sourcing a few of the tools they would have to ramp up production, together with pipes and specialised sand utilized in fracking to extract shale oil.
“They can’t find people, and can’t find equipment,” mentioned Robert McNally, president of consulting agency Rapidan Energy Group. “It’s not like they’re available at a premium price. They’re just not available.”
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Another issue doubtless making oil corporations cautious about investing an excessive amount of, too quick is 2020’s oil bust. The early days of the pandemic drove oil briefly to negative pricing, leading to a spate of bankruptcies throughout the trade.
“They’re more confident we don’t have to worry about a bust, [but] they’re not uncorking the champagne,” McNally mentioned. “2020 is still fresh in their minds….They’re still scarred.”

Apparently very few people on this board remember when oil futures were negative in 2020.

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Posted by Alltheway Tigers!

Baton Rouge

Member since Jan 2004

7221 posts

Posted on 3/5/22 at 9:38 pm to WildTchoupitoulas

quote:
Apparently very few people on this board remember when oil futures were negative in 2020.

Selective research. And strong reasons why oil companies won’t invest the money is because of ESG reasons and the uncertain policies of the present administration. They have no idea what crap will come out of Biden from additional taxes, regulations or environmental costs. If you can’t predict your cost structure to a certain degree, why invest the money.

Nope. Signaling from this administration is anti-oil from day 1. It might just cost them both sides of the aisle and more.

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