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Illustration: Sarah Grillo/Axios

WTI, the benchmark U.S. oil future, traded Wednesday morning at its highest since early March — highlighting how the worst of shale's crisis is seemingly over, though more bankruptcies likely lie ahead.

Why it matters: Its price at the time — $43 — is still too low for many producers to do well, though it varies from company to company.

  • HSBC analysts, in a note this week, said $50 is a key price point.
  • "The current price environment is leading to shut-in production being brought back on, but it is not nearly high enough to stimulate a meaningful recovery in new activity in the majority of U.S. shale acreage," they note.

The big picture: "America’s most prolific shale drillers are accepting a fate once anathema to an industry obsessed with growth: Drilling just to ward off production drops," Bloomberg reports.

What's next: Going forward, the picture remains difficult, in part because the country does not have a handle on the pandemic.

  • While some shut-in wells are returning to production, total U.S. output is expected to remain far below the pre-pandemic peaks for quite a while.
  • The HSBC note this week sees only a "temporary boost" and that "more declines are coming" due to the drilling drop off. Reminder: New shale wells decline very fast.
  • They see a potential output rise this month and next, but then: "[T]his period of growth will be short-lived and will not be able to offset the collapse in oilfield activity for long."

What they're saying: Dallas Fed President Robert Kaplan, in an interview with Bloomberg TV this week, points out that the recovery in oil demand has "stalled a little bit" with the growth of COVID-19 cases.

  • "I think it is going to take until the middle of 2021 for that excess [oil] inventory to be worked off. You are going to have a very challenging energy industry and oil market, probably for the next 6-12 months depending on how the virus proceeds and how demand recovers," he said.

Catch up fast: The latest round of earnings reports provide a look at how the sector is dealing with the pandemic and its financial toll.

  • The big U.S. producer Pioneer Natural Resources posted a $439 million net loss on Tuesday afternoon that reflects the price collapse but also, as Reuters notes, how spending cuts helped "cushion the blow."
  • While Pioneer has largely restored output, the company is still keeping some of its production offline due to the "current commodity price environment."
  • Another large producer, Devon Energy, yesterday afternoon posted a $670 million net loss, with earnings beating estimates, and announced further spending cuts.

What we're watching: More large producers — EOG Resources and Marathon Oil — report later this week, and the huge independent Occidental's earnings come Monday, while several others have already reported substantial Q2 losses.

Go deeper

Coronavirus pandemic brings boom times for swaths of corporate America

Illustration: Aïda Amer/Axios

Not only are corporate earnings coming in above Wall Street’s expectations, but a large swath of corporate America is making more money now than before the pandemic hit.

By the numbers: Earnings season is nearly over. Of the companies that have reported quarterly results, 52% saw bigger profits compared to this time last year, according to data provided to Axios by FactSet.

Off the Rails

Episode 2: Barbarians at the Oval

Photo illustration: Sarah Grillo/Axios. Photo: Jim Watson/AFP/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 2: Trump stops buying what his professional staff are telling him, and increasingly turns to radical voices telling him what he wants to hear.

President Trump plunked down in an armchair in the White House residence, still dressed from his golf game — navy fleece, black pants, white MAGA cap. It was Saturday, Nov. 7. The networks had just called the election for Joe Biden.

Fringe right plots new attacks out of sight

Illustration: Aïda Amer/Axios

Domestic extremists are using obscure and private corners of the internet to plot new attacks ahead of Inauguration Day. Their plans are also hidden in plain sight, buried in podcasts and online video platforms.

Why it matters: Because law enforcement was caught flat-footed during last week's Capitol siege, researchers and intelligence agencies are paying more attention to online threats that could turn into real-world violence.

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