14/01/2020 by OilStoreAdministrator
Speaking on CNBC’s Squawk Box Europe, analysts have cited the degree of US oil production growth as potentially being a deciding factor for oil prices in 2020.
The coming months may also bring a sharp correction, they warned. They cited the other two deciding factors as being the OPEC-led deal currently in place and demand growth.
It is generally anticipated that growth in shale oil production, and with it total US oil production, will slow down in 2020 as investors pressure operators to focus more on generating revenue than growing production. Nothing should ever be taken for granted with the US oil industry, however, especially now that many oil giants have entered the shale sector. For example, ExxonMobil, the oil major behind Mobil commercial vehicle oil and other lubricants, has been rather conservative in the past in developing some of its assets, such as those in the Bakken oil fields of North Dakota.
Macro-Advisory senior partner Chris Weafer said on the programme:
“The big uncertainty this year—and it is already beginning to be talked about—is: can or will U.S. producers be able to continue to add as much extra volume as they have been for the last seven or eight years? This is a huge question.”
He highlighted that many market players were concerned that US oil production growth may be running out of steam, with prices expected at $60-70 per barrel if the US only increases growth by 1.1 million barrels per day and the OPEC+ deal continues.
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