Increase in Oil Production Makes for a Manic Monday03/09/2020

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Over the weekend, Saudi Arabia’s state-owned oil company decided to cut oil prices by ramping up production. This seems to be part of a plan to steal market share from Russia after the two countries failed to reach an agreement on oil prices. As a result of this new price war, U.S. crude oil prices fell over 20% to around $30/barrel. This also impacts U.S. shale producers. Aided by new technology, the breakeven cost for drilling shale has been coming down, but U.S. shale producers generally can’t make money with oil prices under $50 a barrel.

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