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Oil markets keep a wary eye on shale producers' pledge for restraint


Oil markets keep a wary eye on shale producers’ pledge for restraint
By Gerson Freitas Jr, Sheela Tobben and Kevin Crowley on 1/28/2021
(Bloomberg) Shale producers swear this time is different.
After years of profligate spending and unchecked output helped trigger a series of oil-price crashes, U.S. explorers say they’ve learned from their mistakes. They’ve pledged to keep a lid on production, even as crude rebounds amid OPEC supply cuts and the outlook for a recovery from the pandemic-driven global economic collapse.
Convincing the market is another matter, however.
One longtime energy investor sees “zero value” in producers’ promises of frugality. Explorers’ discipline won’t last as oil extends a recovery from historic lows to trade at more than $50 a barrel, a level at which many shale wells are profitable, said Charles Lemonides, the founder of Valueworks LLC, which has about $200 mil ....

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