We will answer the question that how American Shale Oil Companies are affecting the crude market pricing? You need to understand this aspect to understand why crude prices are hovering at historical lows.
The American shale oil is the kind of oil that is extracted from oil shale (sedimentary rocks containing bituminous material), which is an alternative to crude oil. Shale oil from Texas and North Dakota has reduced the USA import from OPEC countries and this has led to the collapse in crude oil prices.
This oil is technologically viable and the cost of producing this oil is comparatively cheaper.
The output from the American Shale oil production has increased and it is flooding the market with cheaper oil. Moreover, now the USA realises that it is better to get this resource of oil help it makes money as the future is going to be without oil as India itself is shifting to electric models by 2030 and you can imagine the thought process of developed countries. However, one wonders that has the USA woken late to capitalise on this asset.
By current estimates, it is believed that the US has enough shale oil reserves to last generations. So, it makes sense for it to monetize these resources.
Just 16 U.S. shale companies operate in fields where the average new well costs are below $35 per barrel, according to Rystad. Among those, Chevron Corp (CVX.N), Devon Energy Corp (DVN.N) and EOG Resources said they plan or are weighing new spending cuts.
The largest U.S. oil producer, Exxon Mobil Corp (XOM.N), turns a profit at $26.90 per barrel on its New Mexico properties, which are about a quarter of its Permian holdings, according to Rystad. The company declined to comment for this story, but earlier this month said it would slow its development in the Permian Basin, the largest U.S. shale field that spans Texas and New Mexico.
Occidental Petroleum Corp (OXY.N), and privately held CrownQuest Operating, both have costs below $30 per barrel, according to Rystad Energy.
In Oklahoma, Continental Resources Inc (CLR.N) can profit below $40 per barrel while EOG. Magnolia Oil & Gas Corp (MGY.N) and Murphy Oil Corp (MUR.N) can withstand the price onslaught in South Texas’ Eagle Ford shale play, according to Rystad.
In North Dakota, only six producers can cover costs at that level. In the Permian, a dozen can.
Most U.S. shale production is “at risk with the current oil prices,” and new drilling projects are likely “to be put on hold relatively quickly,” said Artem Abramov, head of shale research at researcher Rystad Energy.
So, the low crude prices are causing a great upheaval even at American Shale Oil Companies courtyard too, and thus now is the right time to trade MCX crude oil tips to make money in the market as volatility in this segment is producing the daily profit.
The American shale oil is the kind of oil that is extracted from oil shale (sedimentary rocks containing bituminous material), which is an alternative to crude oil. Shale oil from Texas and North Dakota has reduced the USA import from OPEC countries and this has led to the collapse in crude oil prices.
This oil is technologically viable and the cost of producing this oil is comparatively cheaper.
The output from the American Shale oil production has increased and it is flooding the market with cheaper oil. Moreover, now the USA realises that it is better to get this resource of oil help it makes money as the future is going to be without oil as India itself is shifting to electric models by 2030 and you can imagine the thought process of developed countries. However, one wonders that has the USA woken late to capitalise on this asset.
By current estimates, it is believed that the US has enough shale oil reserves to last generations. So, it makes sense for it to monetize these resources.
Biggest Shale Oil Companies facing heat due to low crude Prices
All is not well for the American Shale companies as cost of production is high and prevalent crude prices are low. However, the situation is not that bad as it may appear and these American Shale companies will be able to ride over the crisis. Have a look at their obligations for next 26 years here.
The largest U.S. oil producer, Exxon Mobil Corp (XOM.N), turns a profit at $26.90 per barrel on its New Mexico properties, which are about a quarter of its Permian holdings, according to Rystad. The company declined to comment for this story, but earlier this month said it would slow its development in the Permian Basin, the largest U.S. shale field that spans Texas and New Mexico.
Occidental Petroleum Corp (OXY.N), and privately held CrownQuest Operating, both have costs below $30 per barrel, according to Rystad Energy.
In Oklahoma, Continental Resources Inc (CLR.N) can profit below $40 per barrel while EOG. Magnolia Oil & Gas Corp (MGY.N) and Murphy Oil Corp (MUR.N) can withstand the price onslaught in South Texas’ Eagle Ford shale play, according to Rystad.
In North Dakota, only six producers can cover costs at that level. In the Permian, a dozen can.
Most U.S. shale production is “at risk with the current oil prices,” and new drilling projects are likely “to be put on hold relatively quickly,” said Artem Abramov, head of shale research at researcher Rystad Energy.
So, the low crude prices are causing a great upheaval even at American Shale Oil Companies courtyard too, and thus now is the right time to trade MCX crude oil tips to make money in the market as volatility in this segment is producing the daily profit.
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