Shale firms discount ‘US put’

US shale oil executive Matt Gallagher this week took a poll on Twitter to gauge sentiment toward President Joe Biden’s offer to stock the US emergency oil reserve at prices around $72 a barrel, to give producers an incentive to drill more. The result: nearly 80% of respondents said they did not expect oil futures next year will fall to a level that would trigger any US purchases – negating any boost from what analysts called the “US put” – or using proposed Strategic Petroleum Reserve (SPR) buys to set a minimum price for new oil production. Last week, US President Joe Biden announced a plan to sell off the rest of his release from the nation’s emergency oil reserve by year’s end and begin refilling the stockpile as he tries to dampen high gasoline prices ahead of midterm elections on November 8. Biden said his aim would be to replenish stocks when US crude is around $70 a barrel, a level he said would still allow companies to profit while being a good deal for taxpayers.

Published in The Express Tribune, October 23^rd, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.