Frackers Prepare to Pull Back, Exacerbating a Slowdown in U.S. Oil Growth
After pushing U.S. oil and natural-gas production to record levels, some shale companies are doing the unthinkable: They are planning to pump less.
The pullback is sharpest among the country’s largest natural-gas drillers. Several producers, including EQT Corp. and Chesapeake Energy Corp., have said during third-quarter earnings that they may shrink output next year.
But even more oil-focused shale companies are promising to rein in spending and forecasting slower growth. Diamondback Energy Inc., Callon Petroleum Co. and Cimarex Energy Co., all active in the Permian Basin in Texas and New Mexico, told investors last week that they were contemplating holding next year’s spending around current levels.
Voluntarily restricting growth is a new dynamic for the industry and reflects a calculus that it is better to spend and produce less while hoping for higher commodity prices. A pullback by oil producers would likely cause U.S. oil production growth, already slowing this year, to flatten further in 2020. Natural-gas companies, meanwhile, are attempting to whittle down a glut that has driven prices to multiyear lows.
https://www.msn.com/en-us/money/markets/frackers-prepare-to-pull-back-exacerbating-a-slowdown-in-us-oil-growth/ar-BBWAqCG?li=BBnbfcN
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