Fuel Fix quotes the IEA Suggesting that the recent rally could bring some marginal production online:
““If prices keep rising, we could find that because of the cost cutting and the technology improvements that some of this marginal production is switched back on,” said Neil Atkinson, head of the oil market division at the International Energy Agency in Paris, in an interview Friday. “But how long does it take to reassemble crews, get the labor, the equipment and all the rest of it? This is what we don’t know.””
“Atkinson noted U.S. oil producers haven’t hedged half as much of their crude production as they do in normal years to protect from falling prices. But Morgan Stanley recently noted oil hedging is “already rampant,” and if U.S. producers become more confident they can lock in $45 a barrel now for production in 2017, it could encourage some struggling oil producers to “turn to their bankers and say, ‘the worst is over, call off the bailiffs,’” Atkinson said.”
Here is the link: http://fuelfix.com/blog/2016/03/18/iea-if-oil-keeps-rising-some-marginal-u-s-production-could-be-switched-back-on/
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