The Wall Street Journal’s Moneybeat blog is wondering if strippers are the new swingers. This isn’t dirty talk, but rather an important question in today’s oil market. If oil prices continue to plummet, stripper wells could change the market’s supply-demand balance. This would qualify the wells as “swing producers” or “swingers”—entities that are able to influence prices on a grand scale.
There are about 400,000 so-called stripper wells in the U.S., and each produces less than 10 barrels of oil a day. Many stripper wells become unprofitable when oil drops below $50 a barrel. That means the wells could shut down. Thus, stripper-well production could decline by 300,000 barrels a day this year, causing prices to rise again.
Other analysts are skeptical, noting that stripper wells are historically scrutinized any time oil prices drop.