US operators are unlikely to rapidly raise output
Caution reigns in US shale
Even amid climbing oil prices and strong market backwardation, most US shale independents show little scope or intent to raise output in the short term
“We are not going to change our growth rate, whether oil is at $100/bl or $150/bl”, says Scott Sheffield, CEO of Texan independent Pioneer Natural Resources. Similarly, Houston-based independent Marathon Oil forecasts flat production in 2022 and admitted it is “not allocating any production growth capital in 2022”. Mike Henderson, executive vice-president of operations at Marathon, adds “I want to make clear that, should commodity prices continue to surprise to the upside, we will remain disciplined and have no plans to allocate production growth capital.” Some firms are even warning of production declines despite WTI breaching $90/bl in February and rapidly heading towards $130/bl in March.
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