U.S. shale oil producers pummeled after OPEC decision

Source: Reuters

(Reuters) - Fears low oil prices will persist for years sent shares of U.S. crude producers tumbling on Friday after OPEC failed to agree on a unified output cap, effectively letting its 13 members pump at will under a policy aimed in part at squeezing out U.S. rivals.
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Signaling further pain, the U.S. oil drilling rig count fell this week for the 13th week in the last 14, down to 545, about a third of the number operating this time last year.

Not all of OPEC's members are comfortable with low prices. Many, including Venezuela, need higher oil prices to balance their national budgets.

Given that need, some in the U.S. oil industry hoped OPEC would actually lower production, an expectation that now seems misguided as Saudi Arabia, the group's de facto leader, has pursued a strategy of high production to rattle U.S. rivals.

"I don't see how anybody in their right mind thought that the Saudis were going to cut production," said Mike Breard, oil company analyst at Hodges Capital Management in Dallas.

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