Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Hess Corp. sees oil markets remaining tight in the short term and supporting strong prices as demand recovers more quickly than supply post-pandemic with U.S. shale producers holding back capital spending, its president said on Sept. 27.
The oil producer expects a V-shaped recovery in demand and a U-shaped recovery in supply, Greg Hill said.
Global demand is seen climbing to 100 million bbl/d by the end of 2021 or in the first quarter of 2022 and rising further to around 102 million bbl/d next year from 98 million bbl/d currently, he added.
“So we’re probably going to have adequate price support kind of in the short term—it’s probably $60 to $70 Brent until that supply and demand catch up and go into balance,” Hill said at the Platts APPEC 2021 conference.
Brent futures on Sept. 27 hit a near three-year high at $79.52/bbl.
Longer term there are three wild cards—the potential return of Iranian crude to the market, inflation, and chronic underinvestment in new supply, Hill said.
The biggest wildcard is global upstream oil investment, which has slumped from $650 billion before the COVID-19 pandemic to around $300 billion.
“So that tells me the industry is massively underinvesting to meet future supply,” Hill said in a recorded interview.
Hess is betting on growth from its stakes off Guyana, where it is working with Exxon Mobil Corp. in what is considered the world’s best oil prospect, with a recoverable resource heading towards 10 billion barrels, as well as Suriname and the Gulf of Mexico.
Thanks to new imaging technology, Hill said there are “huge swathes” in the Gulf of Mexico where geologists can now see through salt layers that were previously hard to assess.
“We’ve got 80 blocks to work with now and within that we see some very nice prospectivity,” he said.
Recommended Reading
CERAWeek: Tecpetrol CEO Touts Argentina Conventional, Unconventional Potential
2024-03-28 - Tecpetrol CEO Ricardo Markous touted Argentina’s conventional and unconventional potential saying the country’s oil production would nearly double by 2030 while LNG exports would likely evolve over three phases.
DUG GAS+: Chesapeake in Drill-but-don’t-turn-on Mode
2024-03-28 - COO Josh Viets said Chesapeake is cutting costs and ready to take advantage once gas prices rebound.
CERAWeek: Trinidad Energy Minister on LNG Restructuring, Venezuelan Gas Supply
2024-03-28 - Stuart Young, Trinidad and Tobago’s Minister of Energy, discussed with Hart Energy at CERAWeek by S&P Global, the restructuring of Atlantic LNG, the geopolitical noise around inking deals with U.S.-sanctioned Venezuela and plans to source gas from Venezuela and Suriname.
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
Baltimore Port Closure Could Dent US Coal Export Volumes, EIA Says
2024-03-28 - Baltimore handled exports of 28 million short tons last year, making up 28% of total U.S. coal exports.