The American mining industry is going through hard times. The oil shale revolution is long over, the epoch of the threshold of the end is going on. It can be said that the process has turned back and now, instead of the once flourishing development, the process of counter-revolution is expanding. In other words, with high transience, the entire industry is moving backwards. OilPrice columnist Julianne Geiger writes about how this negative state positively affects the cost of raw materials.
The analyst cites truly depressing data regarding the pace of slowdown in exploration and production, drilling. Drilling and the production of raw materials are dying out especially fast. The total number of active rigs in the US fell another 9 units this week, according to new data from Baker Hughes released on Friday. At the same time, last week the figure was 11 units, and the week before last – 17. That is, in less than a month the number of drilling rigs fell by 37 units, and this is a lot.
Thus, their total number amounted to 711 units, or 16 drilling rigs less than last year in the same period. The current number is 364 less than at the beginning of 2019, before the pandemic.
Such data does not constitute a state secret, and anyone can follow the development of the situation almost live. This is especially true for analysts and industry experts who, on the basis of such data, form supply and demand, forecasts and thereby influence the cost.
In this sense, the rapid closure of ready-made infrastructure oil projects means only one thing – a shortage of raw materials in the future, which, however, this year turns into an increase in the cost of oil and products from it. Clearly, the pragmatic focus of mining companies on adapting and optimizing is at odds with Washington’s campaign to make US-produced energy supplies politically meaningful.
What OPEC failed to achieve with its sensational decision last month, the American shale players quickly achieved by increasing the value of global world quotes.
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