So much for any Saudi hopes that the US would join OPEC+ in implementing production cuts.
Texas Railroad Commissioner Ryan Sitton, the Texas regulator who had proposed mandating oil production cuts in line with the historic April OPEC+ agreement to cut oil output by 9.7mmb/d, called those efforts "dead" a day before the state was set to vote on the measure.
In an interview on Bloomberg TV, Sitton predicted that curtailing production in a process known as “pro-rationing” would fail to get the support needed from the three-member agency, not to mention the state's countless shale producers all of whom are scrambling to convert every drop of oil into precious cash flow.
"At this point we still are not ready to act, and so it’s too late, so there is no proposal to make,” Sitton said adding that "I think that proration is now dead."
As Bloomberg notes, "Sitton had been the most outspoken member of the Texas Railroad Commission, the state’s chief energy regulator, when it came to advocating for production caps." Chairman Wayne Christian recently stated his opposition to cuts in an opinion piece for the Houston Chronicle, and Commissioner Christi Craddick had expressed numerous concerns during the most recent meeting.
The question then becomes if the US will once again ramp up output following the recent rebound in the price of oil...
... even as OPEC+ continues to curtail production, while global oil and gasoline demand, which rising modestly remains far below levels where the market remains in balance. And a close follow up: will output see a renewed surge just as optimism was starting to emerge that global storage caps would not be hit in the next month, sending the price of oil sharply lower again?