Top Permian driller Pioneer Natural Resources might ask shareholders to put plans for minimal oil supply growth on hold for up to three years and to support increasing output by 10% if Europe moves to cut its dependence on Russian oil and needs to find alternatives, CEO Scott Sheffield said March 2 in an interview.
Sheffield said the events of the past week brought a "mindset change," causing him to rethink his Feb. 17 comments that not even $150/b oil would cause him to increase output by more than 5% a year.
"From a business case, we're not going to change our 5% growth long term," Sheffield told the Capitol Crude podcast by S&P Global Commodity Insights. "But if there's a coordinated effort, we would definitely participate in that."
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Register NowSheffield added that US shale could hit 10% growth for about three years, if needed. He added that it wouldn't happen overnight, as US drillers continue to face shortages of sand, rigs, and fracking crews.
Oil prices surged further March 2 despite the International Energy Agency's plan to release 60 million barrels of emergency crude stocks, as international sanctions on Russia increasingly squeeze its oil supply and OPEC+ stuck to its output strategy.
At 0812 GMT, May ICE Brent crude futures were $6.15/b (5.9%) higher than the previous close at $111.12/b. Brent crude futures last traded above $115/b in June 2014.
Futures are now following sharp moves seen in physical crude markets. Key benchmark Dated Brent closed March 2 at $117.30/b, a nine-year high, as prompt supplies tighten further, according to Platts assessments by S&P Global Commodity Insights.
The US Energy Information Administration estimates US oil supply growth at 770,000 b/d in 2022, while S&P Global Commodity Insights raised its outlook to 930,000 b/d to account for higher sustained prices.
EIA estimated February output at 11.7 million b/d, about 1.1 million b/d below pre-pandemic levels, and expects US production to reach 12.4 million b/d by December.
Listen to the full interview with Sheffield on the Capitol Crude podcast.