Today’s Oil Prices Aren’t Survivable For US Producers | OilPrice.com
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Breaking News:
Oil continued its dive into Friday—Brent dropped below $66, WTI scraped $62—and if you’re thinking, hey, haven’t seen those levels since 2021, you’re not wrong.
Today’s WTI prices are not sustainable for some US producers.
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A perfect storm began to brew late Wednesday. First came President Trump’s broadside tariff blitz—blanket duties slapped on all U.S. trading partners, sparking fears of a global trade war. Yes, energy was exempt from the tariffs. Still, investors didn’t need much convincing. Stocks plunged on Thursday, recession talk started buzzing, and oil got hammered in the crossfire. Suddenly, the demand side of the oil equation is looking very shaky.
Then came the second punch: OPEC+. The cartel announced it would be adding three times the expected amount of supply starting in May. That’s not exactly what you want to hear when traders are already running scared over demand destruction.
Thursday ended up being a sharp one-day drop. Friday brought even more pain. Brent crude was down 7.01% at 12:10 pm in New York, while WTI sank to $61.73—well below the breakeven point for many U.S. shale producers—$65 on average, according to the Dallas Fed’s latest survey.
So, how long does this last? If tariffs stick around and slow the global economy, we could be looking at a “lower for longer” oil environment again—something the industry hasn’t had to contend with since COVID lockdowns.
But it’s not all gloom. Some analysts think these tariffs are more bark than bite—an opening gambit to strong-arm trade partners into concessions. If that’s the case, oil prices may rebound quickly. Until then, buckle up. Crude is suddenly in crisis mode, and the usual safety nets—OPEC+ cuts, Asian demand, U.S. shale restraint—aren’t doing the job.
By Julianne Geiger for Oilprice.com
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