US shale industry lowers output despite rising oil prices

Jun 28 (Reuters) – Even as oil prices climbed to $75 a barrel. But U.S. shale producers have maintained pledges to maintain spending curves and maintain output. which is a departure from the previous boom cycle

Crude oil prices have risen this year. And the oil production controls imposed by former OPEC+ producers will make oil drilling boom. But investors want financial returns from larger volumes. and energy financiers are shifting to renewable energy. Therefore, the shale company is determined to maintain discipline.

“I am also confident that producers will not respond to price increases, said Scott Sheffield, chief executive of Pioneer Natural Resources (PIONEER.N), the largest producer in the Permian shale field, he said in an interview with Reuters. Focus on shareholder returns, low spending

last week US crude oil futures prices Trading above $73 a barrel That was the highest since October 2018. Back then, 1,052 U.S. rigs were drilled, but today is much less than half: about 470, according to Baker Hughes.

Shale output remains below its January 2020 peak of 9.18 million barrels per day (mbps), with production from the seven largest fields for the month at 7.77 mbps, or 15.4% below that level, according to data from the National Institutes of Health. US government Overall US first-quarter oil production was 83% of last year’s peak. The US recently raised its 2021 average production outlook to 11.08 Mbps due to higher crude prices. But it is still about 200,000 bpd below last year’s average.

“Oil prices may hit $80 a barrel soon. And I don’t see any more rigs added,” Sheffield said. Rising oilfield activity could drive service prices higher. This is already an increase of about 6%. Pioneer may reduce its active rigs. as operations become more efficient, he said.

OPEC EASING CUTS

Shale’s restraint is key to OPEC’s next steps. Oil producers have gradually increase production more It is confident that US shale will not return to an era of rapid growth. It will take place on Thursday and will consider further unwinding from August. Read more

“So far, the level of activity has supported the narrative on capitalism discipline,” said Jonathan Godwin, a senior officer at data provider Enverus. Fleet activity Frack has remained stable since the 20% jump earlier this year, he said.

in the United States Close-knit companies are heavily involved in adding rigs this year. But Sheffield said those smaller firms should not grow large enough to upset OPEC+ producers.

“The quality of space for the private sector is not as good as the public,” Sheffield said. It estimates that private companies account for 40% to 50% of the total number of US drilling rigs.

Paul Mosvold, president and chief operating officer of Scandrill, which operates the super-spec drilling rig, said: “We are not seeing the upward pressure that we would ordinarily anticipate based on oil prices of $73.

Mosvold reported a slight increase in claims due to soaring oil prices, but said “not much”.

Reporting by Liz Hampton in Denver; Arranged by David Gregorio

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