US Shale Producers The Real Winners of OPEC Deal

There’s joy in the U.S. oil patch, as other oil-producing countries joined OPEC in a deal to slash crude production.

U.S. crude futures soared Monday, rallying 3.2 percent at midday to $53.17 per barrel, and energy stocks also jumped. The S&P energy sector was up 1.4 percent following the deal, which OPEC pushed hard to get in an effort to end a global oil glut and boost prices.

Workers guide a section of drill pipe into a rack after it was removed from a natural gas well being drilled in the Eagle Ford shale in Karnes County, Texas.
Eddie Seal | Bloomberg | Getty Images
Workers guide a section of drill pipe into a rack after it was removed from a natural gas well being drilled in the Eagle Ford shale in Karnes County, Texas.
There’s joy in the U.S. oil patch, as other oil-producing countries joined OPEC in a deal to slash crude production.

U.S. crude futures soared Monday, rallying 3.2 percent at midday to $53.17 per barrel, and energy stocks also jumped. The S&P energy sector was up 1.4 percent following the deal, which OPEC pushed hard to get in an effort to end a global oil glut and boost prices.

“In the sheiks versus shale fight, score one for the shale patch,” said Michael Cohen, head of energy commodities research at Barclays. “It’s not really that simple, but clearly the Saudis have stuff to gain from this. … They have things they need to achieve, from their social constraints and things get worse when prices get low. It’s not a zero sum for sheiks versus shale, but shale certainly is the biggest winner. They were looking at a picture where prices could have conceivably been $40 to $45 for another year.”

via CNBC

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