ConocoPhillips Co.’s CEO on July 19 warned of looming crude oil shortages and price volatility, citing limited spare capacity among OPEC and slow U.S. output gains ahead.
Ryan Lance, head of the largest U.S. independent oil producer, offered a dour outlook on future supply in remarks to members of the Houston Producers Forum. His comments came days after U.S. President Joe Biden returned from Saudi Arabia without success in securing an agreement for the OPEC+ group to boost production.
“Ultimately, demand will go back to pre-pandemic levels,” Lance said while cautioning about OPEC's lack of additional capacity and a U.S. production plateau. “There is a supply crunch coming.”
The United Arab Emirates and Saudi Arabia could add 1 million or 2 million bbl/d over time, but “the rest of the OPEC+ [alliance] is struggling,” including Nigeria, Angola and Libya, he said.
U.S. oil production, which soared by 4 million bbl/d in the three years ended December 2019, is expanding more slowly. “The U.S. will grow shy of a million barrels a day this year ... and we’ll probably grow close to another million barrels next year. But we start to kind of plateau,” he added.
Oil demand ultimately will exceed pre-pandemic levels and peak demand is probably another 10 to 20 years out, he said. Concerns about recession will lead to further market volatility, Lance added.
“If you are going to be in the business, be prepared for a lot of volatility,” he told the energy audience. “It’s going to go up and it’s going to go down, but not necessarily in that order.”
Recommended Reading
BP Restructures, Reduces Executive Team to 10
2024-04-18 - BP said the organizational changes will reduce duplication and reporting line complexity.
ProPetro to Provide eFrac Services to Exxon’s Permian Operations
2024-04-29 - ProPetro has entered a three-year agreement to provide electric hydraulic fracturing services for Exxon Mobil’s operations in the Permian Basin.
M4E Lithium Closes Funding for Brazilian Lithium Exploration
2024-03-15 - M4E’s financing package includes an equity investment, a royalty purchase and an option for a strategic offtake agreement.
Laredo Oil Subsidiary, Erehwon Enter Into Drilling Agreement with Texakoma
2024-03-14 - The agreement with Lustre Oil and Erehwon Oil & Gas would allow Texakoma to participate in the development of 7,375 net acres of mineral rights in Valley County, Montana.
California Resources Corp. Nominates Christian Kendall to Board of Directors
2024-03-21 - California Resources Corp. has nominated Christian Kendall, former president and CEO of Denbury, to serve on its board.