It’s boom time in the U.S. oil patch, but storm clouds are gathering.
Oil companies are planning to slash payroll — as production surges, demand stagnates and storage tanks around the world fill up. The political consequences are potentially large. Falling oil prices could give President Donald Trump a boost in the form of cheaper gasoline. But fall too far, and it risks decimating the industry.
For now, the market is in suspended animation. U.S. oil production hit a record 13.6 million barrels in July and OPEC+ is signaling further production bumps. But many analysts think productions cuts could be needed to bring oil markets into balance.
“There is a lot of question in the market of: ‘Is this growth sustainable?’” said Rory Johnston, an oil analyst who writes the newsletter Commodity Context.
