Due to the coronavirus pandemic effects, the oil shortage of demand, falling prices, poor returns and reduced production shale producers are expected to state the worst second quarter results since 2016.
Oil (CLc1 / LCOc1) has dropped nearly 35% since January, as fuel demand fell during the economic deadlocks. An unusual index for crude oil occurred in April, where WTI prices were on average less than $ 17 per barrel. Nobody expects anything more strange in the second quarter.
Low prices pushed shale oil companies to reduce nearly 2 million barrels of oil production in April and May. Volume recovered somewhat in June, and prices rose to $ 38 a barrel. The partial increase of June has been a cure to people’s financial problems. It’s a bit of a dreamy approach to think that rebound isn’t temporary.
It is said that the number of rock gas oil producers applying for bankruptcy has increased from five in the first quarter to 18 in the second quarter. Many producers’ properties are concerned that they are not economically valuable enough even at today’s stronger prices.
The sector is unfortunately downplayed by investors who are disappointed by the ten-year low return.
