icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

US production rebound will lead to new oil price war, shale executive says

US production rebound will lead to new oil price war, shale executive says
The US oil industry faces a new oil price war if shale production rebounds next year by rising 1 million bpd compared to this year, chief executive at shale giant Pioneer Natural Resources said at BloombergNEF’s annual summit.

Last year, the OPEC+ group broke up their production pact in March after demand started crashing in the pandemic and US crude oil production had hit 13 million bpd in the weeks prior to the start of the pandemic.

“OPEC and Russia were upset that we grew too much,” Scott Sheffield said at the summit. “If we ever start growing again too much, we’re going to have another price war,” the shale executive added.

Also on rt.com Robots threaten to replace hundreds of thousands of oil & gas jobs by 2030 – report

Sheffield continues to believe — as he did earlier this year when Saudi Arabia surprised the market with an extra cut of 1 million bpd — that US oil production will not surge again because operators are very much aware of the consequences of soaring output and will continue to keep disciplined spending.

“If we grow another million barrels a day next year, we’re going to have another price war in my opinion going into ‘23,” Sheffield told the BloombergNEF summit.

One million bpd growth is basically the increase the EIA predicts for US crude oil production in 2022 compared to the average for Q2 2021. As per EIA’s latest estimates, US oil production is set to increase from an average 10.9 million bpd in the second quarter to nearly 11.4 million bpd by the fourth quarter. In the fourth quarter next year, US oil production is expected to average above 12 million bpd — at 12.18 million bpd.

Also on rt.com Top US shale gas basin continues to bleed cash

Pioneer’s Sheffield, however, said he was “totally against” that forecast, noting that he believes US shale would maintain the pledges to not rush to boosting output.

Large listed producers promise restraint, and the market, and even OPEC+, believe restraint will indeed be the case for the US oil industry this year. However, $60 oil makes boosting production too tempting for the private operators, since higher production and cash flows help them grow and pay off debts, without Wall Street breathing down their necks whether they are spending within their means.

This article was originally published on Oilprice.com

Dear readers and commenters,

We have implemented a new engine for our comment section. We hope the transition goes smoothly for all of you. Unfortunately, the comments made before the change have been lost due to a technical problem. We are working on restoring them, and hoping to see you fill up the comment section with new ones. You should still be able to log in to comment using your social-media profiles, but if you signed up under an RT profile before, you are invited to create a new profile with the new commenting system.

Sorry for the inconvenience, and looking forward to your future comments,

RT Team.

Podcasts