For those that missed it, I had written previously on my idea that OPEC’s November 27th meeting would result in them agreeing to not bolster oil prices with supply cuts, but rather facilitate the price decline to trim the fat of high-cost Western production which has been slowly nibbling at their market share (original post here). That scenario played out as predicted. In November alone, we’ve already seen a 40% decline in Texas and North Dakota drilling. Now, less than a month later, with Brent Crude over $10/barrel lower than it was at the time of my original post, cheap oil has claimed its first high-profile victim.
Chevron Corp is putting a plan to drill for oil in the Beaufort Sea in Canada’s Arctic on hold indefinitely because of what it called “economic uncertainty in the industry” as oil prices fall.
In a letter to Canada’s National Energy Board on Wednesday, the company withdrew from a hearing on Arctic drilling rules because it has walked away from plans to drill in the EL 481 block
With January Brent seeming to be finally settling around the $60/barrel range, it’ll be interesting to watch where the oil industry goes from here.