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Shale's struggles will persist despite a rise in oil prices

WTI, the benchmark U.S. oil future, traded Wednesday morning at its highest since early March — highlighting how 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.

Biden raises $141 million more than Trump

Joe Biden's campaign, the Democratic National Committee and joint fundraising committees raised $466 million cash on hand, the presidential candidate's team announced late Sunday.

Why it matters: President Trump's campaign raised $325 million, his campaign communications director Tim Murtaugh announced earlier Sunday.

Editor's note: This is a developing news story. Please check back for updates.

Virtual Emmys address chaotic year for American TV and society

The Emmy Awards Sunday night addressed the major U.S. issues this year — including the protests on systemic racism and police brutality, the wildfires engulfing parts of the West Coast, the census, the pandemic, essential works and the election.

Why it matters: Award shows have always addressed wider cultural issues, but this year — amid unprecedented stress and uncertainty — that trend has accelerated.

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Arrest over Trump letter containing poison ricin

A suspect was arrested for allegedly "sending a suspicious letter" after law enforcement agents intercepted an envelope addressed to President Trump containing the poison ricin, the FBI confirmed in an emailed statement to Axios Sunday.

The big picture: Axios understands that the suspect, a woman, was arrested at the Canadian border while trying to enter New York.

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Trump campaign goes all in on Pennsylvania

The president's campaign is placing more importance on Pennsylvania amid growing concern that his chances of clinching Wisconsin are slipping, Trump campaign sources tell Axios.

Driving the news: Pennsylvania, which has 20 electoral votes, twice Wisconsin's number, actually has been trending higher in recent public and internal polling, a welcome development for the campaign.

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Inside Joe Biden's Supreme Court strategy

Joe Biden’s closing argument will shift to a dominant emphasis on health care, turning the looming Supreme Court fight into a referendum on coverage and pre-existing conditions, officials tell Axios.

Why it matters: Biden aides believed they were winning when the race was about the coronavirus pandemic. Now they plan to use the Supreme Court opening as a raucous new field for a health care fight, returning to a theme that gave Democrats big midterm wins in 2018.

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Ginsburg death displaces violence in cities as dominant social media storyline

Data: NewsWhip; Chart: Andrew Witherspoon/Axios

Ruth Bader Ginsburg-related social media interactions dwarfed all other topics this week — a departure from a run of weeks where, other than the coronavirus, violence in cities was the dominant storyline.

The big picture: In just two days, there were 41 million interactions (likes, comments or shares) on stories about the late Supreme Court justice, according to exclusive NewsWhip data.

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Biden to Senate Republicans after RBG passing: "Please follow your conscience"

Joe Biden made a direct appeal to Senate Republicans in a speech addressing the passing of Supreme Court Justice Ruth Bader Ginsburg, urging them to "cool the flames that have been engulfing our country" by waiting to confirm her replacement until after the election.

The state of play: Senate Majority Leader Mitch McConnell said soon after the news of Ginsburg's death that President Trump's nominee would get a vote in the U.S. Senate by Election Day.

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Leaked Treasury documents reveal massive money laundering in global banking system

Thousands of leaked government documents covering at least $2 trillion worth of transactions reveal how some of the world's biggest banks knowingly moved around the money of oligarchs, terrorists and criminals, with few consequences, according to a massive investigation by BuzzFeed News, the International Consortium of Investigative Journalists (ICIJ) and hundreds of other news organizations.

The big picture: The investigation, published on Sunday, examines more than 2,100 suspicious activity reports (SARs) filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network, known as FinCEN.

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