Oil Producers And Value Vs. Growth: What It Means In The Oil Fields

Oil Producers And Value Vs. Growth: What It Means In The Oil Fields

Bill Gilmer, Director of Institute for Regional Forecasting, C.T. Bauer College of Business

Well lit oil drilling Fracking Rig surrounded by green grass and bushes. There are some clouds in ... [+] the distance and lights on the Fracking Right side of the Fracking Rig.



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Today COVID-19 is the center of attention for American oil as prices hover in the mid-$40s and a vaccine for the virus remains on the horizon. But the U.S. fracking industry has been under continuous financial pressure since the oil bust of 2014 when OPEC and the Saudis withdrew as swing producers in world markets and allowed oil prices to collapse. A moderate oil price recovery in 2017-18 brought a partial return of activity in the oil fields, but it was quickly followed by an industrywide credit crunch in 2019, and the rig count and oil-related employment were in decline again well before the problems brought by COVID-19. 



The most compelling issue for fracking is always the price of oil. It is a high-cost source of oil requiring prices over $60-$65 for real profitability, with $55 oil hurting many companies and $2 natural gas lethal for others.  And it is