No countries are likely to cut the oil production in the recent days. After the sanctions, Iran just began join into the competition. For years of a poor international business income for this nation, the beginning of exporting the oil will not get squeeze for this oil giant. As for Saudi, they are even more targeting an aggressive price of 20 dollar per barrel. And now for US, oil drillers are finally beginning to buckle and the first one to compromise a determinate price.
For more than a year, American oil producers found a way to keep pumping despite a worldwide slide in crude prices. Like cartoon character Wile E. Coyote, U.S. drillers dashed off the cliff and somehow kept running in midair, maintaining volumes even as revenue plummeted. Drilling companies’ latest projections, released in earnings reports in recent days, suggest gravity is finally taking hold.
With crude prices near a 12-year low, drillers are deciding it’s best to keep their barrels in the ground, heeding the advice this week of Saudi Arabia’s Ali al-Naimi. In comments at the IHS CERAWeek energy conference in Houston, Naimi told U.S. producers their only choices were to "lower costs, borrow cash or liquidate" to survive the downturn.
West Texas Intermediate, the U.S. benchmark crude, rose 4.5 percent to $34.54 at 9:16 a.m. in New York.
The surprising resilience of U.S. producers has been a key factor in the 70 percent slide in crude prices over the past 20 months, with operators cutting costs and squeezing more petroleum out of fewer wells to stave off the reckoning. Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, has ruled out a cut in the nation’s output, according to Naimi, leaving U.S. shale to carry the burden of balancing the market.