OPEC crude output cuts should help U.S. shale profits in 2021

SectorOil & Gas

Russia and Kazakhstan will increase their output, reluctant to cede market share to the United States. Overall, OPEC+ had been due to restore 500,000 bpd in each of the two months. Saudi officials were concerned new increases would outpace demand during new coronavirus lockdowns.Prices for West Texas Intermediate on Friday topped $52 per barrel, and the 12-month futures' price CLBALst , which producers use to plan spending on new wells, hit $51.37 a barrel, up from $44.63 at the start of December. BOTTOM LINES TO BENEFITHigher crude prices will fall directly to U.S. producers' bottom lines given recent cost cuts and commitments to keeping output flat.

Companies pledged to keep production flat and use any price increases to boost investor returns or pay down debt.Rising prices in recent years have "tended to be a bit of a mirage," said Thomas Jorden, chief executive of Cimarex Energy. "We're going to be highly disciplined in setting a budget," he added at a Goldman Sachs conference on Thursday.In top two U.S. shale fields, oil and gas companies are profitable in the $30 per barrel to low $40s per barrel range, according to data firm Rystad Energy. This year's higher prices could push the shale ...read more...