• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 12 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 11 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 12 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 12 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 11 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 10 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 14 hours Saudi A to Splash $100 Bln on India
  • 1 day Itt looks like natural gas may be at its lowest price ever.
  • 13 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 7 hours Washington Eyes Crackdown On OPEC
  • 1 day Amazon’s Exit Could Scare Off Tech Companies From New York
  • 22 hours NEW FERUKA REFINERY
  • 9 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
Barclays: Head-Spinning Volatility In Oil Will End

Barclays: Head-Spinning Volatility In Oil Will End

Structural changes in the oil…

Oil Majors Double Down On Battery Investment

Oil Majors Double Down On Battery Investment

Oil majors are increasingly interested…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Oil Producers Accustomed to Price Volatility At This Point

offshore rig

Three years of market downturn has caused oil producers to become accustomed to barrel price volatility, according to a new report by S&P Global Platts.

"We've just decided to embrace volatility," ConocoPhillips CEO Ryan Lance said during an industry conference this week. "We can predict prices are going to go up and then they're going to go down, but not necessarily in that order."

Oil prices are known to be cyclical, but the troughs and crescents of those cycles are getting closer and closer together, the CEO said, adding that the price “feels balanced today, but it feels tenuously balanced.”

ConocoPhillips has rethought its operations to allow the company to be profitable at a $40 barrel after the oil price crashed in 2014. Roughly a quarter of the company’s assets are in U.S. shale projects, and others are in Alaska, the North Sea and Asia Pacific. Enhancements on drilling times have hit a bottleneck, but more innovation on completions and enhanced recovery could push the industry’s average breakeven price even lower, Lance said.

According to CNBC, Conoco offloaded $16 billion worth of non-core assets last year to make itself leaner and more resilient to price shocks by improving its business margins, Lance said.

ConocoPhillips will only invest in new projects that can be profitable at an oil price of below $50 a barrel, Lance told the Financial Times late last year, adding that the company will continue to focus increasingly on U.S. shale despite skepticism about its growth potential among analysts.

Conoco believes that in addition to operational efficiencies that have been improving in the shale patch over the last few years, shale is more resilient to oil price swings than other segments of the industry. Meanwhile, everyone is watching the Middle East and Saudi Arabia in particular to fix the price crisis using the power of the Organization of Petroleum Exporting Countries and its new allies.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Mamdouh G Salameh on March 07 2018 said:
    Since the fundamentals of the global oil market are projected to remain very positive for this year and 2019 and since the market is almost rebalanced, there should hardly be any volatility with oil prices trending constantly upwards in the absence of any geopolitical developments take place.

    The reason for the current volatility is that every time oil prices show signs of heading upwards, right on cue we get announcements by the EIA or the IEA about large rises in US oil production mainly shale oil and also major build in US crude oil and gasoline inventories impacting on oil prices and forcing them to trend downwards, hence the volatility.

    It is the same game of capping oil prices between a shale ceiling and an OPEC floor of what has become known as the shale band. In 2017 the ceiling was $60/barrel and the floor was $50. In 2018, shale drillers will try to limit oil prices within a ceiling of $70 and a floor of $60 if they can.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News