Big American shale producers are reportedly selling oil at a loss despite soaring crude prices

[Yo_Mama_Been_Loggin]

Oil prices above $70 have not lifted the fortunes of some US shale producers who have been stuck selling at pandemic-era oil prices, according to a report in the Financial Times.

Nearly a third of US oil output is being sold at $55 a barrel, while some especially unlucky producers are selling below $50, the FT reports, citing IHS Markit data.

The culprit is hedging contracts taken out during the depths of the pandemic, effectively locking in low oil prices for producers who had feared further price declines. In April 2020, as it became prohibitively expensive to store oil, West Texas Intermediate crude traded at sub-zero values for the first time ever, briefly bottoming out at -$37.63 per barrel.

As a result, shale producers rushed to hedge against persistently low prices, leaning on swaps to bet against oil going up. But a brisk recovery and OPEC oil-supply cuts have pushed up crude prices, sinking US producers' hedges, according to the FT.

https://www.msn.com/en-us/money/markets/big-american-shale-producers-are-reportedly-selling-oil-at-a-loss-despite-soaring-crude-prices/ar-AALVpv2

[PortTack]

1. It used to be the oil prices had to be $70 for shale to make a profit

With soaring material costs I imagine that figure is much higher...just as with everything else