BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry

« News Home
:: Monthly Archive

News Topics
:: Air Pollution
:: Agreements & M&A's
:: Alternative Fuels
:: BunkerBlog
:: Cargoes & Storage
:: Company News
:: Efficiency, Costs & Charges
:: Environment
:: Events
:: Financial
:: Fuel Quality & Testing
:: Lubes & Additives
:: Oil Spills
:: People
:: Port News
:: Projects
:: Regulation, Legal
:: Services, Products,Technology
:: Statistics & Research
:: Vessels

Regional Archive
:: Americas
:: Asia/Oceania
:: Europe
:: M.East/Africa

BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
Home » News

All eyes (back) on US shale oil producers

By A/S Global Risk Management.

Michael Poulson, Oil Risk Manager at A/S Global Risk Management. Image credit: A/S Global Risk Management

Updated on 05 Dec 2017 09:55 GMT

As OPEC meeting took place last Thursday, a lot of tensions and expectations that had been built in the market, were released in what appeared as quite a non-event.

This leaves a lot of room for looking at the U.S. once again. The U.S. has been highly active during the last 3-4 weeks in terms of production and exports. As OPEC have chosen to extend the current oil production cut (1.8 mio. barrels' production off the market), leading to increase in oil prices, it is natural to expect the U.S. to ramp up production and go for market share.

But it seems that some of the large shale drilling companies are shifting strategy a bit. The general strategy has for a long time been to increase production and expand drilling sites, which has cost a lot of money and generated negative cash flows. Now it seems like strategy is changing to a more investor-focused strategy. More specifically it means that investments will be more controlled and stringent in order not to flood the market, sending prices plummeting as in 2015-2016. Likely it does not mean that the producers will cut spending or output as global demand still seems very strong with increasing export possibilities for the U.S.

The danger for the large producers is that with increasing prices, smaller producers with higher break-even prices are likely going to step into the market and increase production. As more producers step in, the costs of equipment, labour etc. will increase for everyone.

The momentum in the latest uptrend in the Brent price seems to have been wearing off during the first couple of days in December, which is why inventory stats could have a significant impact on the price this week. The American Petroleum Institute (API) will release the weekly oil stocks data later today.

A/S Global Risk Management is a provider of customised hedging solutions for the management of price risk on fuel expenses. The company has offices in Denmark and Singapore. For further details about its risk management products and services, please call +45 88 38 00 00 or email hedging@global-riskmanagement.com.

Related Links:

Focus turning to US oil production
A/S Global Risk Management Ltd.

Latest News:

Vopak and Maersk to launch 0.5%S bunkering facility in Rotterdam
Dan-Bunkering merges with Australia Bunkering
Oil and fuel oil hedging market update
SHI to build two bunker-saving LNGCs for Celsius Tankers
Oil slightly down on trade war and fears of economic slowdown
VPS issues flash point distillate alert for New York
Viking Line's bunker costs rise 3.6% in H1
Global Risk Management hires former Geos trader
Maersk profitability 'significantly impacted' by higher bunker costs
Oil and fuel oil hedging market update
Coming up: oil rig count, US production data and meeting between US and China
Done in a month: Mercuria takes 30% stake in Aegean as refinancing transaction is agreed

Page Links:

Latin America
Middle East
North America
North Europe
South Europe
Index Summary
Price Highlights
Cape Town
Las Palmas
New Orleans
Rio de Janeiro
Latest News
Middle East
Air Pollution
Agreements & M&A's
Alternative Fuels
Cargoes & Storage
Efficiency, Costs & Charges
Fuel Quality
Lubes & Additives
Oil Spills
Port News
Services, Products, Technology
Statistics & Research
Contact & Terms
Contact Us
Terms & Conditions
Privacy Policy
Upcoming Events