US shale running out of time
Financial conditions may have rallied, but the long-term survival of many firms still hangs in the balance
US shale is making a slow recovery. WTI prices have risen to above $40/bl after descending into negative territory at the tail-end of April, and producers are returning curtailments to the market. But the economic crisis is far from over. Rumbling volatility resulting from Covid-19 and fears over future lockdowns have placed a ceiling on the rebalancing of oil prices. And much of the industry faces a wall of debt maturities in 2021 that could prove unsurmountable. “While an improvement in oil prices towards $40/bl saved a significant number of E&Ps and prevented early Chapter 11 filings in June-July, the current price environment is in no way sufficient for a large number of the E&Ps
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