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.
With oil prices in the $70s per barrel range, U.S. oil output could grow to more than 14 million bpd from between 13.3 million bpd and 13.4 million bpd now, Lance said.
LNG SUPPLY
The LNG market will grow to north of 700 million tons from around 400 million tons now over the next decade or so, Lance said, adding the market was growing at an annual compound growth rate of 1-2%.
“It’s going to take a lot of growth. It’s going to take growth in Qatar, its going to take growth in the United States, the two biggest suppliers in the world, to satisfy the enormous amount of energy growth that’s coming,” the ConocoPhillips chief executive said.
Kaabi, who is also CEO of QatarEnergy, added that Qatar, one of the largest LNG global exporters, was “not worried at all” about a supply glut of liquefied natural gas (LNG).
“I think the U.S. volumes are going to go to certain markets that are mostly Europe, South America. And our volume will predominantly be serving Asia,” Kaabi said.
“I think we need all that volume.”
Kaabi said Chinese and Indian buyers are discussing additional LNG supply from Qatar. He will meet buyers of Qatari LNG in China, where he is flying for a conference.
“But we have multiple countries that are discussing with us additional volumes. And these negotiations take time,” he said.
Qatar began trading operations a few years ago when it saw “money left on the table” when traders were buying spot Qatari LNG.
Qatar is currently trading around 10 million tons of LNG, around half of which is non-Qatari. By 2030, it aims to trade 30-40 million tons of non-Qatari LNG.
(Reporting by Andrew Mills and Federico Maccioni; Writing by Nayera Abdallah and Yousef Saba; Editing by Louise Heavens, Kirsten Donovan, Alex Lawler and David Evans)