"Drill baby drill is gone forever", Saudi Arabia's energy minister Prince Abdulaziz bin Salman declared after the last meeting of Opec+ when the 23-member alliance decided to rollover its current level of cuts, pushing prices to $70 per barrel.
He was signalling an end of an era for shale, which proved resilient to the vagaries for the oil market and helped crown the US as the biggest producer of oil and gas in the market overtaking Saudi Arabia and Russia.
But the emergence of the Covid-19 pandemic heralded the slow demise of the US shale industry, which had proved nimble to various market conditions prior to the health crisis.
US oil production, which peaked at 13 million barrels per day averaged 10.4m bpd in February, which is down 0.5m bpd from January production, according to the US Energy Information Administration.
EIA forecasts US crude oil production will rise to almost 11m bpd in March. American output will average 11.1m bpd in 2021 and 12m bpd in 2022.
Oil prices are currently trading in the range most conducive for US shale drillers. West Texas Intermediate, the US crude gauge and Brent, the international marker, are nearly 30 per cent higher than at the start of the year. That's even after both Brent and WTI, pulled back some of their gains following the decision by Opec+ and an attack on a major energy installation in Saudi Arabia this week.
Despite the higher oil prices, the shale industry, which operates on low margins, was languishing under $300 billion worth of losses amid a wave of bankruptcies last year has not swung into action as some might expect it to.
At CeraWeek, a major oil industry-related event which took place online last week due to Covid-19, Vicki Hollub, the chief executive of Occidental Petroleum, a big player in the US shale basins, painted a sombre picture of the industry.
"In my view shale will not get back to where it was in the US," she told a panel discussion, where she was joined by Dr Sultan Al Jaber, the group chief executive at Abu Dhabi National Oil Company.
The decline in US production by 2m bpd over the course of last year would "aid in getting the market supply and demand back into balance", she added.
However, demand is going to remain substantially revised as the US, which has the worst rate of Covid-19 infections globally, will adapt remote working as part of corporate work culture, longer-term. Nearly 42 per cent of workers in the world's largest economy were working from home by the middle of last year, according to Stanford University.
The pandemic, which erased all job gains after the financial crisis of 2007-08 also saw 33 per cent of the labour force "not working". Only 26 per cent, largely essential workers, commuted to their business premises.
"So, by sheer numbers, the US is a working-from-home economy. Almost twice as many employees are working from home as at work," according to Nicholas Bloom, an economist at Stanford.
With US unemployment at 6.2 per cent, according to data from the Bureau of Labour Statistics and a significant portion of the population giving up on searching for new employment, the repercussions on energy demand are bleak.
With more and more workers either not working or working from home, the demand for oil will remain close to stagnant.
Last year, due to the pandemic and ensuing lockdowns, US crude consumption fell to around 18.12m bpd, which was the lowest level since 1995, according to the EIA.
Recovery this year is forecast to remain weak, with liquid fuel consumption set to rise by 1.45 million bpd to 19.51m bpd in 2021.
Tepid domestic demand casts questions about the long-term viability of the shale sector.
"We should not have made these investments," Anders Opedal, chief executive of Norway's Equinor, which made investments in US shale told Bloomberg last month.
Shale's ability to return profits has increasingly come under the spotlight.
Ms Hollub's Occidental posted its sixth quarterly loss in February. "The profitability of shale is much more difficult than people ever realised," she said.
The outages across the US southern belt in February due to an unprecedented winter storm also shut-in production at a time of higher prices.
A rebound in US shale remains challenging, leaving Opec+ firmly in control.
Any growth this year would be "very modest", said Lee Maginniss, a managing director at Alvarez & Marsal, who focuses on energy.
Shale companies who prefer to work with free cash flow may struggle to find adequate capital to fuel their expansion.
The companies will look to maintain a "production mindset" but within an industry that will look to continue to consolidate.
Following the demand crunch and widespread bankruptcies in the US energy industry, oil majors Exxon Mobil and Chevron were said to have discussed the possibility of merging.
The US energy sector will continue to see such activity in the "small and mid-cap market" where companies will look to merge and create scale, said Mr Maginniss.
However for the industry at large, "it's a relatively flat outlook, that the companies are expressing today", he added.
MWTC
Tickets start from Dh100 for adults and are now on sale at www.ticketmaster.ae and Virgin Megastores across the UAE. Three-day and travel packages are also available at 20 per cent discount.
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Overall standings
1. Christopher Froome (GBR/Sky) 68hr 18min 36sec,
2. Fabio Aru (ITA/AST) at 0:18.
3. Romain Bardet (FRA/ALM) 0:23.
4. Rigoberto Uran (COL/CAN) 0:29.
5. Mikel Landa (ESP/SKY) 1:17.
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test India won by innings and 53 runs at Colombo
- 3rd Test August 12-16 at Pallekele
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UAE currency: the story behind the money in your pockets
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
BRIEF SCORES
England 353 and 313-8 dec
(B Stokes 112, A Cook 88; M Morkel 3-70, K Rabada 3-85)
(J Bairstow 63, T Westley 59, J Root 50; K Maharaj 3-50)
South Africa 175 and 252
(T Bavuma 52; T Roland-Jones 5-57, J Anderson 3-25)
(D Elgar 136; M Ali 4-45, T Roland-Jones 3-72)
Result: England won by 239 runs
England lead four-match series 2-1
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
