Ryan Lance, CEO of ConocoPhillips, warned at a Houston Producers Forum on Tuesday of upcoming crude oil shortages and price volatility, citing limited spare capacity of the Organization of the Petroleum Exporting Countries (OPEC) cartel and slow U.S. fossil fuel output going forward.
Lance made the remarks on the heels of Joe Biden’s trip to Saudi Arabia where he unsuccessfully tried to secure an agreement for OPEC+ to boost production.
Biden’s plea comes even as experts say OPEC+ is already operating near capacity and as the president continues to hobble production of domestic oil and gas supplies.
Things will return to normalcy down the road but not without challenges.
“Ultimately, demand will go back to pre-pandemic levels,” Lance said. “There is a supply crunch coming.”
“If you are going to be in the business, be prepared for a lot of volatility,” Lance said. “It’s going to go up and it’s going to go down, but not necessarily in that order.”
Reuters reported on Lance’s remarks:
U.S. oil production, which soared by 4 million barrels per day in the three years ended December 2019, is expanding more slowly. “The U.S. will grow shy of a million barrels a day this year … and we’ll probably grow close to another million barrels next year. But we start to kind of plateau,” he added.
Oil demand ultimately will exceed pre-pandemic levels and peak demand is probably another 10 to 20 years out, he said. Concerns about recession will lead to further market volatility, Lance added.
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