Shale producers expect oil prices at $ 30 per barrel to be able to reactivate rigs.
Oil prices ended gains on Friday after reports of the US Petroleum Institute showed that US crude inventories rose 8.4 million barrels last week, a much larger increase than the previous year. with expected.
|The tankers are moored near the ports of Long Beach and Los Angeles. Photo: Getty Images|
WTI crude oil in June term decreased about 2.1% to 24.05 USD / barrel. WTI oil had a 5-day rally. July Brent crude oil was stable at 30.97 USD / barrel.
Just a day ago, oil prices were rising again with expectations of restoring oil production activities in US shale mines.
Oil prices rose as European and Asian countries ended a blockade to prevent the spread of the new strain of coronavirus and as producers cut supply after demand fell. But analysts warn the rebalancing of this market will be difficult.
“We are talking about normalizing supply and demand but we have a long way to go,” said Lachlan Shaw, director of commodity strategy at Australia’s national bank. “When prices start to maintain momentum, there will be a point where producers begin to reverse closed wells,” he said.
But analysts also quoted comments from US shale oil producer Diamondback Energy, saying they would consider drilling plans if WTI holds above $ 30 a barrel as a sign that producers would not want to stop. long-term production.
Bloomberg said Diamondback Energy based in Midland, Texas is limiting production this month by 10-15% and for workers to leave their jobs in the second quarter. They plan to maintain the operation of 150 wells, maintain low output only and expect no new rigs to be built.
Parsley Energy chief executive Matt Gallagher said it would take about two weeks to bring the oil wells in production compared to the previous one, given that oil prices are around $ 30 a barrel.
“Right now the world doesn’t need our products,” he said, predicting Parsley would probably maintain a cut of about 25% for June.
Russia highly appreciates the US participation in the OPEC + agreement
Russian Finance Minister Anton Siluanov said that the US’s participation in the new OPEC + group agreement was a guarantee for more aggressive moves of the oil market.
“The advantage of the current agreement is that all the oil producing countries are involved in the negotiations, including the US. This is the guarantee for further successful moves in the oil market” – Mr. Siluanov said in an interview with Vedomosti newspaper.
The Russian minister also reiterated the OPEC + agreement that Russia refused to join in March. He said that at that time, even if Russia agreed to the agreement, there would still be other OPEC + agreements. and is constantly changing due to the complex evolution of the COVID-19 epidemic.
According to him, even if Russia and some other countries in March signed an agreement with OPEC, they will still have to reconsider the agreement, because the world oil demand has dropped sharply due to the translated, so the agreements reached will not last long.
This view was previously mentioned by Deputy Minister of Energy Pavel Sorokin. He said that in March, the Russian side did not agree with OPEC in early March because Moscow realized that an outbreak of corona virus disease affected oil demand in February and increased uncertainty. uncertain about the severity of the pandemic outside of China.
If global oil demand is not well understood, reducing OPEC’s output from 600,000 bpd to 1.5 million bpd would be “just as salt in the tank”.