Texas energy regulators said on Tuesday that they will not enforce oil production cuts and they were ending the one-month debate over whether to participate in global oil policies for the first time in 50 years due to crude prices reaching historically low levels.
Texas remains being the largest US state of oil production, pumping about 5.4 million bpd of crude oil. Last year, its production increased by 600,000 basis points, accounting for about 41% of the country’s total.
Global energy demand collapsed due to negativities caused by coronavirus, stagnation with traveling, business life, economics and industrial bans, and the over supply supported by the abundance of shale. WTI crude dropped to minus $ 37 on April 20. Local prices are still below the cost of production for some oil companies, even though futures have recently increased to $ 24.
The movement to consider common production cuts was rejected on Tuesday.
On the other hand, many oil major companies such as Chevron, Exxon Mobil and Occidental have taken steps to cut hundreds of thousands of barrels (bpd) of shale output before any government action.