Conservative hedging bruises US shale
Operator balance sheets are benefitting from the uplift in oil prices, but many could miss out as the bulk of their production is locked into more muted pricing
Results season painted a cheerier picture for much of the US shale patch in Q1, with revenues rebounding as WTI comfortably surpassed $50/bl. But while many operators boasted stronger cash flow and debt reduction during the quarter, cautious hedging could see the sector miss out on billions of dollars.
Around 41pc of forecast US E&P production has so far been hedged in 2021, estimates consultancy Rystad Energy. And the average floor price of $42/bl is significantly less than the $65/bl WTI average in April.
By David Hodari American oil production is set to drop again this year, with the shale industry s output showing few signs of recovery despite a broader pickup in economic activity, the Organization of the Petroleum Exporting Countries said Tuesday. In its closely watched monthly market report, OPEC cut its forecast for the amount it expects production from its noncartel counterparts to increase in 2021 by 200,000 barrels a day to 700,000. Canada, Norway, Brazil, and China will drive that overall increase, but persistently low capital expenditure and the unexpected winter storm that Texas suffered in February mean U.S. supply is expected to fall by 100,000 barrels a day this year after dropping 800,000 barrels a day last year, the cartel said.
‘Would be brilliant, Great signing’: Some Leeds fans excited as transfer news emerges
Photo by David Price/Arsenal FC via Getty Images
Some Leeds United fans on social media are rather excited by reports that they’re interested in signing Ainsley Maitland-Niles this summer.
The Arsenal man is seemingly out of favour at the Emirates, being sent out on loan to West Brom in January, but now it seems as though he could be shipped out on a permanent basis.
Leeds are reportedly keen, but as you can imagine, they’re not the only club in the race to sign him, with Everton also keen to bring him in.