• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days If hydrogen is the answer, you're asking the wrong question
  • 13 hours How Far Have We Really Gotten With Alternative Energy
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
China Buys Up Russian Oil

China Buys Up Russian Oil

China is on track to…

Saudi’s Won’t Let Oil Stay At $75: Pioneer CEO

OPEC is likely to cut oil production again, Pioneer Natural Resources CEO said at a Goldman Sachs Conference in Miami on Thursday.

“Saudi is not going to let Brent stay around $75 a barrel,” Scott Sheffield said, adding that it wouldn’t surprise him “if they had another cut.”

Sheffield believes that oil futures will stay in backwardation going forward, because “there is no liquidity in the market”. No one is hedging, Sheffield said, so there’s nothing to bring up the forward prices.

As for where Pioneer’s CEO sees oil headed, Sheffield sees the $80 a barrel mark as the base, with an upside of $150.

Back in the United States, Sheffield sees production from U.S. shale’s most prolific basin, the Permian, eventually hitting 7 million barrels per day. But after reaching this volume, it will plateau, with only Chevron, Pioneer, and Conoco having the ability to produce upwards of a million barrels per day of oil equivalent in the Permian by 2030. This, however, will be achieved with flat—or declining—rig counts as services prices run at what Sheffield feels is an untenable high. 

BMO Capital Markets said last month that more than two-thirds of the Permian’s premium land has already been drilled, leaving oil companies to look for permits beneath Midland. World Oil cited unknown analysts that projected the Permian could plateau within five years, with Permian’s two main zones pumping less oil per foot drilled in each new well.

According to research firm Enverus, U.S. shale—carried mostly by the Permian—has provided 90% of the United States’ oil production growth over the last ten years. This slowdown in U.S. crude oil production and the prospect that U.S. shale can no longer respond quickly to changing market conditions has emboldened OPEC. The group led by Saudi Arabia likely now feels that it can keep prices elevated without a production response from the United States, Bank of America said last month.

By Julianne Geiger for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh Salameh on January 05 2023 said:
    Scott Sheffield is absolutely right. Saudi Arabia and the overwhelming majority of OPEC plus members with the exception of Russia need a Brent crude price of 100 dollars a barrel or higher to balance their budgets.

    Therefore, it is a fair assumption that if Brent crude remains at the low 80’s, OPEC plus may decide in its next meeting to cut production.

    US shale oil production is unlikely to rise again. This has far less to do with capital discipline and almost everything to do with being a spent force.

    Dr Mamdouh G Salameh
    International oil economist
    Global energy expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News