Crude Hits Six Year Low

Eagle Ford Producers Struggle to Survive
Oil Prices Fall to Six Year Low

Oil Prices Fall to Six Year Low

Producers with operations in the Eagle Ford Sale are continuing to struggle as crude prices hit a six year.

Related: EIA: U.S. Oil Production Has Peaked

On Tuesday China made the move to devalue its currency, sending shockwaves around the globe and contributing to U.S. crude oil falling to its lowest levels in six years. 

The federal Energy Information Administration (EIA) announced in its monthly Short-Term Energy Outlook that it had lowered its 2016 forecast price for U.S. benchmark oil (Brent) by $8 to $54 per barrel in 2016 and its 2015 forecast by $6 to $49 per barrel. The agency said it expects Brent to average about $59 per barrel in 2016 and about $54 per barrel in 2015.

“The recent price declines reflect concerns about lower economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing actual and expected growth in global inventories,” the agency said in its analysis.

As second quarter results come in from Eagle Ford producers, they reflect companies that are struggling with the current pricing environment.

Related: Chesapeake Energy Loses $4.15 Billion

Related: Sanchez Energy Reports Huge Losses

Related: Noble Energy: $109 Million Loss in Q2

As tough as things have been, the worst may be still around the corner. If prices remain this low, the financial squeeze will get tougher for companies as we move into the fall months.

Dennis Cassidy, a managing director at AlixPartners commented that “Three months at $40 would shake people out pretty good. Everyone is a bit numb and fatigued.”

Last month. the The EIA announced that U.S. oil production had peaked in April as it hit 9.7 million barrels per day the highest level since 1971.


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Elizabeth Alford

Elizabeth Alford

Elizabeth Alford writes on significant news developments in the Eagle Ford oil and gas play taking place across South TX. She is a freelance writer with an extensive communications, PR, and staff writing background.
Elizabeth Alford

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