US oil price boom: Crude set to surge over $150 a barrel as reserves set for major 'shock'
Permian Basin, the US’s highest producing oil field
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Oil prices in the US are set to boom with the cost of a barrel rocketing to $150, a drilling company CEO has said.
The output of crude oil in the Permian Basin, the US’s highest-producing oil field, will one day peak and if there is no new exploration for additional fields, prices will surge.
Continental Resources, a shale driller, said that prices are likely to rise between $120 (£98.73) to $150 (£123.42) for a barrel.
“That’s going to send a shock through the system,” said Continental CEO Doug Lawler.
WATCH NOW: John Carney warns oil will hit $100 a barrel
If no new drilling is encouraged, “you’re going to see more pressure on price,” he said.
Lawler’s comments came during the first ever American Energy Security Summit in Oklahoma City hosted by Harold Hamm, the owner of Continental Resources.
At the summit, shale executives called for the US government to adopt more consistent policies that will allow for additional drilling.
Hamm criticised the Biden administration for their policy which governs drilling on federal land.
He said that there should be a full-on resumption of oil drilling permits on such land.
Hamm warned that failure to do so would lead to more stringent energy supplies and higher costs.
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“When the federal leases were pulled off the table with this latest administration, it took a full year just to modify everybody’s drilling plans,” Hamm said.
“Everything you planned that you’re going to do, if you can’t get permits, you have to basically go to plan B, and plan B is not a good plan.”
However, CEOs at the summit stated that they had no intention to boost crude oil output.
Oil production peaked at an all-time high in July and is now facing its third month of decline.
“I hear people say, 'We’re back up to record levels of production',” Chevron Corp Chief Executive Officer Mike Wirth told summit attendees.
“With better policy we would be beyond that.”
Lawler said Continental has no plans to increase output, even if oil overtakes the $100 (£82.28) mark.
“We are investing at a very prudent level consistent with our cash flows,” Lawler said.
“To go and invest and being producing as much as we can is not how we generate the greatest value.”
Benchmark US crude prices have increased by 12 per cent to more than $90 (£74.05).
Hamm warned that failure to expand drill sites would lead to tighter energy supplies and higher cost
Reuters
Republican Presidential Candidate Nikki Haley agreed with Hamm’s demands, stating that she would seek to bolster domestic energy production by expanding drilling sites if she became president.
“Nikki Haley was a great example of someone who cares about us, who appreciates what we do,” said Occidental Petroleum Corp CEO Vicki Hollub.
“Our politicians can’t lose sight of the fact that unless we’re energy independent we do not control our own destiny.”
High crude oil prices have a direct impact at the pumps meaning the cost will be moved onto motorists.
“I think oil is definitely going to reach $100 a barrel and I don't see a reason why it's going to come down,” Breitbart author John Carney told GB News.
“The Biden administration really messed up by releasing so much from the strategic reserves right now. They have nothing left.