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Shale Cutbacks to Fall on Weakest Drillers as Glut Drowns Market

  • Only the biggest oil explorers can weather a prolonged slump
  • Major companies account for about 20% of U.S. shale, IHS says
    

Photographer: Daniel Acker/Bloomberg

Updated on

U.S. shale drillers are engaged in a bitter test of wills as sinking oil prices force the weakest operators to retreat just as OPEC urges the world’s biggest source of crude to help rescue a market roiled by the coronavirus pandemic.

With American production expected to decline this year for the first time since 2016, it’s becoming increasingly clear any reductions in domestic output will fall on the companies that can least afford it. The result is likely to be a sector increasingly dominated by international behemoths that have the ability to endure the downturn and ramp back up once prices recover.