Cost-Cutting Shale Drillers Limit Potential for Oil Rally: Chart

Oil Rose as Producers Said to Meet Over Freeze

Oil may struggle to rally past $50 a barrel this year because shale drillers in the U.S. will respond to higher prices by boosting activity, according to a Bloomberg survey of analysts. The rally in West Texas Intermediate crude faltered at about $60 in 2015 and efficiency gains mean shale is profitable at $45 to $55 this year, according to consultant Petromatrix GmbH. There’s a cache of suspended wells stretching from south Texas to the Rocky Mountains that can be brought into production as soon as prices rise high enough, according to Bloomberg Intelligence.

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