JooMix

Style Switcher

Layout options
  • Boxed Layout
  • Full Width Layout
Primary Color

11 Unit, 6the floor , Jalal Ale Ahmad High Way, Tehran , Iran

+98-21 8838 4292

Low oil prices don't cut into US production by much

When a commodity costs more to produce than the current market price, producers usually stop producing it

It's called the law of supply and demand.

When a commodity costs more to produce than the current market price, producers usually stop producing it. But when it comes to U.S. crude, a global crash in prices hasn't been matched by deep cuts in production.

The biggest impact so far has been felt on investment in new wells, as U.S. producers big and small have slashed capital spending and sidelined drilling rigs. As of this month, about 350 rigs were drilling for oil in the U.S. — about a quarter of the peak in October 2014.

That pullback has brought economic pain to much of a U.S. oil industry that saw big gains in jobs and wages during a production surge that began in 2012. But while investment in new production has dried up, oil continues to flow from the wells that have already been drilled.

Overall output has fallen by about 6 percent since peaking a year ago, but many producers have opted to keep on pumping, even as prices remain stuck at around $40 a barrel — less than half the peak of mid-2014.

Petrobourse

11 Unit, 6th floor , Jalal Ale Ahmad High Way, Tehran , Iran

by phone: +98-21 8838 4292

by e-mail: Info@azgint.com

or fill in the form on our contact page

Join our Newsletter

Vestibulum ante ipsum primis in faucibus orci luctus et ultrices posuere cubilia Curae; Etiam id enim egestas, congue est id, hendrerit magna.