- West Texas Intermediate staged a solid comeback this week following Monday’s price plunge
- Oil prices were routed on Monday by over 7% as the delta variant’s spread put the oil demand recovery in doubt
- However, prices recovered Monday’s losses over the week on expectations that the oil demand recovery hasn’t been derailed
- Bloomberg estimates that big oil’s combined free-cash-flow rose to $22.1 billion in 2Q 2021 versus $19.3 billion in Q1
- The combination of capital discipline and oil’s impressive rebound this year should result in much better profits
- For reference, from 1Q 2020 to 1Q 2021, big oil (BP, Shell, Total, Chevron, Exxon) averaged $6.98 billion in combined free-cash-flow
- Schlumberger echoed Baker Hughes this week in saying that the rebound in US shale will likely slow this year as producers moderate spending (Bloomberg)
- The mantra this time around among the largest shale explorers has been to keep output mostly flat and return cash to shareholders
- “In North America, we anticipate the growth to moderate,” Schlumberger CEO Olivier Le Peuch said in a statement. “However, drilling activity could still surprise to the upside due to private E&P operator spending.”