Additionally, oil’s recent rally does not mean the industry is bracing for a return to $80 to $100 per barrel pricing. Far from it. Many large and small exploration and production firms scaling back to cope with lower prices.
“In the past five months, U.S. production sank by 590,000 barrels a day, or more than 6 percent. The bad news: Drillers are cutting costs with a speed and brutality not seen in decades, enabling many oil producers to maintain output even as prices remain low. Goldman Sachs Group Inc. sees crude falling a further $10 a barrel as storage tanks fill up in the coming months,” according to Bloomberg.
“Last week, the number of US Oil rigs fell by 26 to 614, which is a decline of 977 rigs from last year. Oil companies have been lobbying hard to get the 40-year export ban on Crude Oil repealed, and it looks as though the idea is picking up some momentum in both houses of Congress. Regardless, it looks as though the slump in commodity prices could last years, according to Goldman Sachs and Citigroup, which may act as headwinds for a possible comeback in Oil prices,” according to Options Express.
SPDR S&P Oil & Gas Exploration & Production ETF
