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OPEC Crude Output Cuts Should Help US Shale Profits in 2021

Business Economies Economy oil and gas OPEC shale production US

OPEC Crude Output Cuts Should Help US Shale Profits in 2021

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HOUSTON—A decision by OPEC and allied countries to cut crude production through March delivered a late Christmas present for U.S. shale firms that have slashed costs, but any rise in prices spurred by the unexpected move may be just a modest stocking stuffer. U.S. crude oil production has fallen 2 million barrels per day in the last year as low prices and demand forced shale producers to cut their losses. Investors had already been pressuring the industry to curb spending and boost returns before the pandemic hit. Shale output was quickly cut, but might return quickly if prices keep rising. On Jan. 5, Saudi Arabia, the world’s biggest oil exporter, said it would voluntarily reduce its production by 1 million barrels per day (bpd) in February and March, after Russia pushed to increase output, worried about U.S. shale capitalizing on the group’s cuts. Russia and Kazakhstan will increase their output, …

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