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The oil and gas boom in the United States was made possible by the extensive credit afforded to drillers. When oilprices were high and production was relentlessly climbing, energy related junk bonds looked highly profitable. The situation will compound itself if oilprices stay low.
Oilprices have climbed by about 50 percent from their February lows, topping $40 per barrel. But the rally could be reaching its limits, at least temporarily, as persistent oversupply and the prospect of new shale production caps any potential price increase. That is not good news for oilprices.
United States M&A activity for upstream oil and gas deals set records in 2011 for both deal values and deal counts, according to PLS, Inc., a provider of information, marketing and advisory services for the oil and gas industry. We expect continued strong activity in oil and liquids-rich resource plays in 2012.
Oil production capacity is surging in the United States and several other countries at such a fast pace that global oil output capacity could grow by nearly 20% from the current 93 million barrels per day to 110.6 Such an increase in capacity could prompt a plunge or even a collapse in oilprices, he suggests.
Argentina offers one of the few places on earth where oil companies are not suffering from the full force of the collapse in prices. Argentina regulates oilprices, a policy originally intended to insulate the public from the whims of the market, protecting people from triple-digit crude prices.
The financial pages of Canadian newspapers have been full of headlines lately announcing the potential of two large shale oil fields in the Northwest Territories said to contain enough oil to rival the Bakken Formation of NorthDakota and Montana. enthused the Financial Post. “NEB But with U.S. on Friday, June 5 th.
Oilprices have rebounded strongly since March. The benchmark WTI prices soared by more than 36 percent in two months, and Brent has jumped by more than 25 percent. Other companies—including Devon Energy, Chesapeake Energy, and Carrizo Oil & Gas—have also lifted predicted increases in output for 2015.
The EIA noted that concerns about decreased demand because of increasing COVID-19 cases have recently driven crude oilprices down, offsetting some initial price increases due to larger inventory draws. As a result, EIA’s crude oilprice forecast remains mostly unchanged from the July STEO.
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