Investment in oil supply has collapsed. It may not roar back
Plunging investment, a battered cartel and a new fight over oil supply
IN APRIL, WITH the world in lockdown from covid-19 and oil demand sinking faster than at any time in history, oil producers from Dhahran to the Delaware basin made the only possible choice: cut supply, fast. American output fell by about 2m barrels a day between March and May. The Organisation of the Petroleum Exporting Countries (OPEC) and its allies agreed to reduce supply by a record 9.7m barrels a day in May and June. The cuts helped propel the price of a barrel of Brent crude from less than $17 in mid-April to $42 on June 5th.
This article appeared in the Finance & economics section of the print edition under the headline “After the fall”
Finance & economics June 13th 2020
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