US shale producers will continue to boost output, making the possibility of a global oil shortage unlikely, ExxonMobil Chairman, President and CEO Rex Tillerson said at a conference in London. "I don't necessarily have the view that we are setting ourselves up for some big collapse in supply within the next three, four, five years," he said.
A number of large oil producers are in position to rebound after making efficiency gains during a period of low oil prices. "Capital spending has come down massively, and majors have taken a lot of the fat out of their organizations," said Neil Mehta, an analyst at Goldman Sachs.
The Permian Basin will be the only US oil region to post an increase in oil production in November, when output is expected to surpass 2 million barrels of oil per day for the first time since 2007, according to the Energy Information Administration. Overall production is forecast to decline 0.7% to 4.43 million barrels per day next month.
Hess CEO John Hess says that while higher prices are needed to help fund long-term projects, the US shale industry can maintain flat output at a certain price. "Because of operational efficiencies and productivity, the industry needs $50 (per barrel) to hold shale production flat," he said.
Houston-based Oasis Petroleum has announced it will sell 48 million shares of common stock to help finance its acquisition of Bakken Shale assets from SM Energy. The company anticipates gross proceeds from the stock sale to reach $518.4 million, while the deal with SM is worth a reported $785 million.
The American Petroleum Institute reports that US crude stockpiles fell by 3.8 million barrels last week, and that contributed to a slight increase in oil prices on Wednesday. Oil prices were also bolstered by reports of declining production in China, as well as increased optimism on the planned output cut from the Organization of the Petroleum Exporting Countries.
ExxonMobil has announced plans to begin drilling about 50 miles off the coast of Liberia, with plans to break ground on its first exploratory well in November. At this time, ExxonMobil is unable to say how much the drilling will cost or the time it will take.
The US Energy Information Administration is projecting a 12th consecutive month of declines for US shale oil production in November. Estimates call for shale oil output to fall by 30,000 barrels per day, which would cause total output to reach its lowest levels since March 2014.
Authorities suspect arson is the cause of a weekend fire in Reasnor, Iowa, that burned construction equipment being used in the building of the Dakota Access Pipeline. The company estimates the cost of the damage will be in the millions of dollars.
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