American energy companies are already reactivating oil rigs after OPEC agreed to cut oil production, sending prices skyward.
From Daily Caller
Chevron reactivated seven new rigs in West Texas, adding to the 477 U.S. oil rigs currently in operation. The company plans to spend $1.5 billion annually searching for and drilling new oil in Texas and expects to increase investments there as prices continue to rise.
Continental Resources is reactivating two new rigs in South Texas, and other shale oil producers, including EOG Resources Inc., Devon Energy Corp., and Whiting Petroleum Corp. Shale oil stock prices are soaring, leaving petrol companies flush with cash to invest in ramping up production.
“The shale producers will be the ones who benefit from the oil-producer deal and the likely rise in oil prices,” Charles Perry, CEO of energy-consulting firm Perry Management, told MarketWatch.
The Economist pointed out,
On November 30th Saudi Arabia led members of the oil producers’ cartel in a pledge to remove 1.2m barrels a day (b/d) from global oil production, if non-OPEC countries such as Russia chip in with a further 600,000 b/d. That would amount to almost 2% of global production, far more than markets expected. It showed that OPEC is not dead yet.
The size of the proposed cut, the first since 2008, caused a surge in Brent oil prices to above $50 a barrel. Some speculators think it may mark the beginning of the end of a two-year glut in the world’s oil markets, during which prices have fallen by half and producers such as Venezuela have come close to collapse.
This can only be good news for the US Oil Industry