Drill Baby Drill Update - May 20

[dan_s]

Actually, it is going in the opposite direction.

DOHA (Reuters) -U.S. shale oil output will flatten out if prices remain where they are now and will start to decline with prices in the $50s per barrel, the CEO of ConocoPhillips said on Tuesday in the latest prediction that oil's slump could curb U.S. supply.

The comments from Conoco CEO Ryan Lance come as forecasters including OPEC and the International Energy Agency have trimmed their expectations for shale output after prices sank to the lowest since 2021 this year at near $55 for U.S. crude.

"The breakeven probably hasn't moved a lot," Lance said at the Qatar Economic Forum in Doha. "I think long-term, if you're going to see oil prices in a comfortable range - maybe in the 70s, or 65-75, we'll still see continued modest growth out of the U.S.".

"But we see plateauing production, probably the end of this decade, coming out of the U.S., unless there's going to be another technological breakthrough in our business. And don't bet against our industry."

If oil fell below $60 a barrel, there would be a decline in investment and global power requirements would not be met, Qatar's energy minister Saad al-Kaabi said, speaking alongside Lance at the same event.

Global crude benchmark Brent was trading below $66 and U.S. crude near $63 on Tuesday. Prices slid after U.S. President Donald Trump announced trade tariffs on April 2 and fell more after OPEC+ decided to add supply faster than planned.
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MY TAKE: At the current level of active drilling rigs and completion crews, it will be tough to hold U.S. oil production flat. For geological reasons (i.e. - running out of Tier One drilling locations), U.S. oil production might be after to hang around the 13 to 14 million bpd for a few more years before going on decline in 2028. EIA now includes NGL production as "oil".
For total U.S. oil production to grow significantly, we'd need to see a big increase in offshore drilling and Alaska to be opened up.

BOTTOMLINE: EIA and IEA will need to lower their non-OPEC+ oil production forecasts.