Share to Twitter Share to Linkedin Emily Pickrell, UH Energy Scholar The success of the vaccines against COVID-19 did a lot to assuage fears, grow the economy globally and increase oil use this spring, sending prices sharply up. Yet, just how long this economy recovery and rising oil prices will continue is anybody's guess. Oil prices have certainly responded to a more normal economy: After West Texas Intermediate prices (a good gauge for US oil) bottomed out at $21 per barrel in March 2020, prices hit $74 in July 2021, and are now roughly $70. These price fluctuations are largely a result of the pandemic and resulting demand drop. The massive cuts that OPEC and associated countries (called OPEC+) took helped the markets recover some. However, the sub $40 price per barrel immediately crippled cash flow for many US shale producers, who operate on very slim margins. "The most crucial thing to me is that the pandemic basically put a clamp on shale production," UH Energy Finance Professor Praveen Kumar said. "Many smaller shale producers had to shut down production and did not have the financial ability to ride out financial collapse, and went bankrupt. U.S. shale production is still… Read full this story
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