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While U.S. shale producers previously continued pumping in the face of low prices, the industry has recently revealed a spate of capital spending reductions, indicating still low crude prices are taking a toll. Low oil prices are also prompting speculation about credit downgrades for some exploration and production firms that already carry junk credit ratings.
“In the Permian, there have been some troubling reports in recent weeks that shale drillers are slowing down and having problems with their existing wells,” according to OilPrice.com. “The decline rate is acceleratingand some wells are producing a higher gas-to-oil ratio than expected. Pioneer Natural Resources’ disappointing figures from the second quarter have sparked some concern that the Permian might not live up to the hype.”
International Energy Agency data revealed China imported 8.55 million barrels per day of oil in the first half of the year, or up 13.8% year-over-year, which has made the emerging economy the largest crude importer, even ahead of the U.S.
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