How should we view this round of international crude oil price plunge?

Although there is a lag between total U.S. oil production and the number of active drilling rigs, it is now clear that U.S. oil output will collapse in the coming period: Trafigura’s Co-Head of Oil Trading stated on Monday: “Attention is now focused on the need to slow production.” “This is the market’s realization that the situation is extremely serious.” Incidentally, Trafigura—one of the largest crude oil exporters from the U.S. Gulf of Mexico—believes that output declines in Texas, New Mexico, North Dakota, and other states will far exceed expectations, as companies respond to negative pricing... Prior to Monday’s oil price crash, the market consensus was that daily production would fall by approximately 1.5 million barrels by December. Now, market observers expect losses to emerge as early as the end of June. Roger Diwan, Oil Analyst at IHS Markit Ltd., said: “The severity of price pressure is likely to prompt immediate cessation of activity and well shut-ins.” As detailed last week, this price shock is especially acute in the spot market, where crude producers—such as Sour in South Texas and Public Oil in eastern Kansas—were forced last week to pay over $50 per barrel to offload their output. Thus, with ConocoPhillips and shale producer Continental Resources both announcing plans to shut in production, the U.S. oil industry has finally begun shutting down. Regulators in Oklahoma voted to allow oil drillers to shut in wells without forfeiting leases; New Mexico made a similar decision. Even North Dakota—the state long synonymous with the U.S. shale revolution—has rapidly scaled back spending: “Oil producers have already shut in over 6,000 wells, cutting output by roughly 405,000 barrels per day—about 30% of the state’s total production.” Yet this will not be limited to the United States: production cuts are visible across regions—from Chad, a poor landlocked African nation, to Vietnam and Brazil—where producers are either already cutting output or planning to do so. Mitch Flegg, CEO of North Sea oil company Serica Energy, remarked: “I don’t want to sensationalize this, but yes—it’s clearly at risk of being shut in.” “In certain parts of the world, this is a real and tangible risk.” At emergency board meetings held last week, oil companies large and small discussed the most pessimistic outlook ever contemplated. For smaller firms, the next few weeks are purely about survival. But even major players—including ExxonMobil Corp. and BP Plc—will offer insights into the crisis when they release their quarterly earnings this week. Then, on Friday, May 1, Saudi Arabia, Russia, and other OPEC members will join a production-cut agreement, slashing output by 23%—9.7 million barrels per day. State-owned Saudi Aramco has cut production. Russian oil company Rosneft announced that exports of its flagship Urals crude will fall to a 10-year low in May.

Mining giant Anglo American has raised its cost forecast for this year and lowered its output forecast.

Anglo American announced on Thursday that it has raised its 2022 cost forecast by 9%, reflecting stronger currencies in commodity-producing countries, inflationary pressures, and anticipated output declines. The company is facing a shock from rising diesel prices and has revised upward its cost guidance for all major commodity businesses except diamonds—increasing guidance for copper, nickel, platinum-group metals (PGMs), iron ore, and coking coal by 5%, 10%, 7.8%, 14%, and 24%, respectively. Additionally, the company lowered its 2022 PGM production forecast from 4.1–4.5 million ounces to 3.9–4.3 million ounces; its iron ore output forecast from 63–67 million tonnes to 60–64 million tonnes; and its coking coal output forecast from 20–22 million tonnes to 17–19 million tonnes.

UK's Serica Energy lowers annual production forecast on Triton delays

14 hours ago

Serica Energy lowered its 2026 production forecast to below 40,000 barrels per day following Triton vessel delays resuming in November. Third-quarter output fell 56% due to maintenance, though the firm reaffirmed cash flow guidance supported by current gas prices.

reuters

2026-10-18

UK's Serica Energy lowers annual production forecast on Triton delays

UK's Serica Energy lowers annual production forecast on Triton delays

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