U.S. shale producers are redeploying cash, rigs and workers, cautiously confident the energy sector has turned a corner after Donald Trump’s election victory and OPEC’s recent signal that it plans to curb production.
The downturn produced a leaner, more efficient U.S. shale industry that was forced to develop and quickly adapt new technology to compete with conventional oil supplies during a two-year period of depressed prices.
“You’re starting to see a little bit of light at the end of the tunnel,” Ryan Lance, chief executive of ConocoPhillips, the largest independent U.S. oil producer, said in an interview last week. “We’re beginning to put capital back to work, but we’re being cautious.”
Specifics of the deal by the Organization of the Petroleum Exporting Countries – especially what it means for each member – need to be finalized at a meeting later this month in Austria. But the tentative agreement indicated OPEC kingpin Saudi Arabia is keen to end a damaging two-year oil price war. That prodded U.S. producers to action. [nL8N1C42M9]
The U.S. oil drilling rig count has grown 6 percent since OPEC’s September accord, according to oilfield analytics firm NavPort, with additions across the country’s top shale fields including the Permian (7 percent) and the Bakken (17 percent).
Also, Trump’s victory is expected to bring to the White House an advocate for oil and gas drilling, who will slash regulations and encourage new energy industry development. [nL1N1DA35B]
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