The US is likely to lose its spot as world’s top oil producer this year as budgets have been slashed and capital investments have been put on hold in America’s shale country in the wake of the massive price slide and the sheer destruction of demand brought on by the coronavirus outbreak across the globe.
The US was a top oil producer globally in 2018, courtesy of the shale oil boom.
Key quotes
“If we continue where we are with these low prices, we’ll see a big decline in U.S. oil production. It will no longer be number one,” Dan Yergin, energy expert and vice chairman of IHS Markit, told CNBC’s “Capital Connection” on Monday.
“We see in this coming month of April what could be a 20 million barrel a day decline in oil demand. It’s unprecedented. That’s six times larger than the biggest downturn during the financial crisis period,” Yergin said.
WTI oil tumbled to an 18-year low of $21.80 per barrel on Monday and Brent oil slipped to $21.68 per barrel. Oil benchmarks are currently down 54 percent on a month-to-date basis.
Saudi Arabia earlier this month slashed its crude prices for Asian clients, reversing course from supporting price via output cuts in a bid to capture greater market share. Russia too followed suit, adding to bearish pressures around prices.
Share
