When asked by the Federal Reserve Bank of Dallas, some 66% of executives at oil and gas companies said they believed that US oil production had peaked.
US oil production has steadily increased in recent years, ultimately leading to it becoming the world’s biggest producer of oil, but the coronavirus pandemic has taken its toll on the industry. When demand for oil fell as various lockdowns came into force around the world, the oil price inevitably dropped, leading some US operators to rein in production.
The recently published survey covered 154 executives at 148 oil and gas firms in New Mexico, Louisiana and Texas. The survey did not ask, however, whether the executives believed the peak would be temporary, but there are signs this may not be the case.
BP, for example, forecasts that the world will need three million fewer barrels of oil each day, and it is looking to reduce its own production by 40% over the coming decade.
It therefore seems likely that US operators will focus more on the more profitable plays that are sustainable, even with lower oil prices. For example, ExxonMobil, the oil major responsible for Mobil lubricants like slideway oil, said in 2017 that it could profit from its newly acquired shale oil assets at $40 per barrel while having the ability to accelerate or slow production in response to oil prices.
Most executives also expressed a belief that OPEC would play a more prominent role in influencing oil prices over the coming years.