Saudi Arabia’s energy minister has no quarrels with US shale and even sees output cuts by Opec (The Organization of the Petroleum Exporting Countries) and its allies as directly aiding American drillers.
“The action we have taken, quickly in December and that we’re seeing implemented as we speak, is a lifeline to US shale producers,” Khalid Al-Falih said at a conference in Abu Dhabi.
The Organization of Petroleum Exporting Countries, led by Saudi Arabia, agreed to cut oilNSE 0.46 % output this year to support prices. The group and its allies, known collectively as OPEC+, said they would start to trim 1.2 million barrels of daily production this month to stabilise the market. They already reduced output by 600,000 barrels a day in December, Al-Falih said last week.
Crude producers in the US are pumping a record 11.7 million barrels a day, according to the Energy Information Administration. Shale explorers need almost $54 a barrel for their oil to eke out a profit because of rising costs for equipment, crews and raw materials needed to pump crude, according to JPMorgan Chase & Co.
With oil prices rising, thanks in part to the Saudi-led cuts, that break-even level is in sight.