Massive Hike in Oil Prices as the U.S. Observes Restrained Shale 

U.S. is witnessing the highest spike in crude oil prices for over two years, with the U.S. Shale producers limiting their contributions.

Shale producers have incorporated a very restricted number of extra rigs and limited their production with an incline focused on elevated prices and profits. The current scenario observes the surge in oil prices to be solely propelled by the reducing responsiveness of the Shale sector.

The spot-month Brent futures prices recorded the highest level rise in prices since April 2019. In contrast, U.S. crude oil futures have attained the highest position since October 2018, indicating a growing requirement for more drilling and production. The total value of functional rigs in the United States drilling for oil has instantly escalated more than twice from its cyclical low in August 2020, as established by oilfield services firm Baker Hughes.However, there has been a considerable delay in rig administration and the total number of rigs employed since mid-February.

Growth in the number of active rigs nailed 3.5 per week in the last 15 weeks, a significant drop from the average growth of 6.2 per weak achieved over the 20 weeks prior. The number of active rigs was 359 last week, which was a massive decline than the number of active rigs in January, 670, and 825 in April 2019. These records indicate the growth to be slower in the late 2020 and initial phase of 2021.