Crude-oil bulls threatened as shale patch revives drilling plans

Crude-oil bulls threatened as shale patch revives drilling plans: "The rally in crude oil is reviving the U.S. shale boom, threatening speculators who are the most bullish on prices since July. Money managers increased their net-long position in West Texas Intermediate crude by 3.9% in the seven days ended May 5, U.S. Commodity Futures Trading Commission data show. That’s a level last seen toward the start of last year’s price crash. Short positions declined to the lowest this year. A 37% rebound in WTI since March has encouraged companies, including EOG Resources Inc., to lay out plans to resume drilling. The shale boom had stalled amid a record decline in rigs seeking oil, and the government is predicting lower output this month. Any acceleration in drilling will raise concern that the U.S. supply glut could worsen. “We could soon see a second surge of production growth,” said Stewart Glickman, an equity analyst at S&P Capital IQ in New York. “EOG is a rather conservative company, so if they are willing to dip their toes back in the water, others will as well.” WTI futures gained $3.34 to $60.40/bbl on the New York Mercantile Exchange in the period covered by the CFTC report. The contract lost 16 cents to $59.23/bbl in electronic trading at 11:44 a.m. Singapore time. EOG, the biggest U.S. shale oil producer, said May 5 that it plans to increase drilling as soon as prices stabilize at about $65. Production Outlook Shale-oil explorer Pioneer Natural Resources Co. said it’s preparing to deploy more rigs as early as July, while Carrizo Oil & Gas Inc., Devon Energy Corp. and Chesapeake Energy Corp. last week raised their full-year production outlooks."

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