US, WASHINGTON (ORDO NEWS) — The Texas Railroad Commission, which is the regulator of the state’s oil industry, refused to impose production restrictions.
Negotiations with major market participants lasted a very long time, almost 10 hours, but the decision to impose quotas was never made.
Among the negotiators are Exxon Mobil, Occidental Petroleum, Pioneer Natural Resources and Marathon Oil.
However, as the chairman of the commission Wayne Christian said, this issue is not yet closed.
Everyone understands that the situation in the industry is critical, and many companies simply will not be able to function. A series of bankruptcies will lead to a sharp increase in unemployment. A huge number of people will be literally on the street.
It is worth saying that the largest companies specializing in shale mining are in favor of reducing and introducing quotas, as was done in the last century.
And such giants as Exxon Mobil, on the contrary, believe that it is not necessary to intervene in market mechanisms, the situation will resolve itself.
Their position is not new, it was clear that they would defend it to the end.
They have invested billions of dollars in exploration for new deposits, and do not want to lose this money. In addition, they probably expect that they will absorb smaller players or buy up the assets of bankrupt enterprises.
Some players are calling for a decision on production not at the state level, but at the national level, but it is more difficult to do, because such measures are contrary to antitrust laws.
We add that Texas produces almost 6 million barrels per day, or 40% of all oil in the United States.
This is a very large volume, more than any OPEC member produces, except for the Saudis. Obviously, the introduction of restrictions would help stabilize the global market.
In the meantime, the American WTI is much cheaper than the North Sea Brent, and the price difference has increased literally in recent weeks.
The problem is also that companies simply have nowhere to put up their oil, there is no demand, and there is no access to tankers, and this is an additional transportation cost.
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