Number of fracking operations drops as low oil prices raise concern over outlook

CNBC's Brian Sullivan reports how America's fracking boom is beginning to collapse along with the price of oil.

Stocks rose sharply on Thursday as oil prices recovered even more ground after a historic plunge while Wall Street digested the latest U.S. unemployment and earnings data.

The Dow Jones Industrial Average climbed 334 points, or 1.4%. The S&P 500 and Nasdaq Composite both advanced 1.3%. At its session high, the Dow was up more than 400 points, or 1.7%.

Chevron and Exxon Mobil were among the best-performing stocks in the Dow, climbing more than 3% each. The S&P 500 energy sector gained 4.1% as Apache, Noble and Devon Energy all rallied more than 10%.

West Texas Intermediate futures for June delivery jumped 30% to $18 per barrel as traders increased bets on U.S. production cuts. WTI also rallied on Wednesday.

Earlier in the week, concerns over a lack of energy demand sent WTI’s May contract — which expired Tuesday — into a negative price. Crude prices are also down sharply year to date even after their strong gains over the past two days.

“The resulting price action is highly damaging for many oil producers, and certainly implies a sharp fallback in US shale fracking, contributing to much weaker US exports and capex later this year,” wrote Charles Dumas, chief economist at TS Lombard.

Oil’s rebound helped equities claw back some of their steep losses from earlier in the week. Between Monday and Tuesday, the S&P 500 and Dow dropped more than 4% before rallying around 2% on Wednesday.

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[tensai]

Gentlemen, the Fed is not going to let the oil sectors going down. Oil sectors is like sub prime in 2008. Jim brings out a good point, why are all these oil stocks going up. Cause they know the Fed will bail them out. Brian knows it, he just don't wanna talk about it in the open. Can you imagine how the tax payers and the Democrats going to react to that?

[rs]

Sure taxpayers can bail them out, but what happens if oil prices stay low? That's the problem. Supply and demand forces will eventually show up again.

[Bradgilliswhammyman]

most of these oil workers make 6 figure they will be fine.

[YAHVISIONRowles]

Jobs being lost in the oil industry will be the talk all through 2020.

[valetudo]

alright so no answer as to why oil stocks are going up? I own energy and I don't like it.. it doesn't seem right

[marekkolenda]

Watch for housing market collapse next week because financial problems and coronavirus epidemic.

[Bradgilliswhammyman]

This dinosaur juice needs to be 5 bucks a barrel.

[marekkolenda]

Powell and Fed could bailout 100 millions $ US oil and gas industry because is strategic economic sectors.

[vietimports]

if you are for free market forces, you are for consolidation and bankruptcies. if you are fine with seeing retail getting destroyed by amazon BEFORE coronavirus, then you are fine with the heavily distressed and indebted oil industry being destroyed as well. dont pick favorites just because energy investments are classic oligarch plays

[marekkolenda]

Possible about 50% US industry collapse after conavirus epidemic ends from hotels restaurants to service sectors