Top executives at U.S. shale drilling giant Continental Resources Inc. said oil prices will rise to $150 a barrel unless the U.S. government does more to encourage drilling.
Doug Lawler, chief executive officer of Continental Resources, said in an interview with the media that crude oil production in the Permian Basin will peak one day, just as it has in shale fields such as the Bakken region of North Dakota and the Eagle Ford of Texas. He said without new drilling, "oil prices will be $120-150" .
"It's going to send shockwaves through the system," he said on the sidelines of the U.S. Energy Security Summit in Oklahoma City. Without a policy to encourage new drilling, "you're going to see more [upward] pressure on prices."
Now, shale executives are calling on the Biden administration to create a coherent policy that would allow them to drill more. Failure to do so, they warn, will lead to tight energy supplies and higher prices.
However, the ceos also pointed out that they will not significantly increase crude oil production as oil prices approach the $100 mark.
International oil prices have risen more than 10 per cent this year. U.S. benchmark crude futures are currently near $90, while Brent crude futures are currently hovering around $92.
After hitting an all-time high in July, oil production from U.S. shale fields is shrinking, and government analysts expect it to fall for a third straight month in October.
Speaking at the same summit, Chevron CEO Mike Wirth said U.S. energy policy is hampering oil production .
"I hear we're back to record levels of production. If there were better policies, production would be higher." "He said.
Growing calls for $150 oil
The Continental Resources CEO isn't the only one predicting $150 oil prices.
Christyan Malek, jpmorgan's global head of energy strategy, also warned recently that Brent crude could extend its rally to $150 a barrel by 2026.
Malek explained that there are several factors behind his warning of $150 oil, including production capacity shocks, energy supercycles, and a push to move the world further away from fossil fuels.