Letter from Houston: Fiscal discipline has positives and negatives
No rush for a production rebound makes sense. But it may impact on the long-term attractiveness of a career in oil
The Texas oil industry—and production across much of the US more broadly—has, unsurprisingly, spent a year struggling to adjust for highly uncertain demand conditions. It still also bears the psychological scars of last year’s negative April WTI price. To briefly recap, overwhelming selling demand to close out long positions from paper traders unable to take delivery of physical barrels and a lack of Cushing tank capacity forced the expiring WTI futures contract to previously unseen lows. Physically traded WTI—along with other US grades, which often trade over the counter and share a positive correlation with WTI paper—also weakened considerably. As a reaction, according to the EIA, Lower-48
Also in this section
26 April 2024
While the US has been breaking records for its premium grade crude, there are doubts over whether you can have too much of a good thing
26 April 2024
Slowing demand growth and capacity expansions will squeeze refiners in coming years
25 April 2024
Some companies with assets in Israel have turned towards Egypt as tensions escalate, but others are holding firm despite rising tensions
24 April 2024
But even planned exploration activity is unlikely to reverse declining output from mature fields