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

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza