‘Spend­ing binge can kill oil mar­ket’

New Straits Times - - Business -

Harold Hamm, the bil­lion­aire shale oil­man, said the United State in­dus­try could “kill” the oil mar­ket if it em­barks into another spend­ing binge, a rare warn­ing in a busi­ness fo­cused on fast growth to com­pete with Or­gan­i­sa­tion of the Petroleum Ex­port­ing Coun­tries (Opec).

The state­ment, at an en­ergy con­fer­ence in Hous­ton on Wed­nes­day, comes as top shale firms an­nounce large in­creases in spend­ing for this year, and the US govern­ment says do­mes­tic oil out­put next year would sur­pass the record high set in 1970.

Opec min­is­ters said they were keep­ing a close watch on shale pro­duc­tion to de­cide in late May whether to ex­tend oil-sup­ply cuts into the sec­ond half of the year.

Oil prices plunged five per cent on Wed­nes­day to their low­est level this year, fall­ing just above US$50 (RM222.5) a bar­rel, on in­vestor con­cerns about un­bri­dled growth in Amer­ica’s shale basins swelling US in­ven­to­ries.

“US pro­duc­tion could go pretty high,” said Hamm at the CERAWeek by IHS Markit con­fer­ence in Hous­ton, one of the largest gath­er­ings of oil ex­ec­u­tives in the world.

“But it’s go­ing to have to be done in a mea­sured way, or else we kill the mar­ket.”

Hamm runs Con­ti­nen­tal Re­sources Inc, one of the big­gest shale pro­duc­ers in the coun­try with drilling op­er­a­tions that run from the Bakken in North Dakota to Ok­la­homa.

Af­ter oil prices dou­bled over the past year, US shale drillers have an­nounced big in­creases in spend­ing for this year.

BLOOMBERG PIC

The United States says it ex­pects do­mes­tic oil out­put next year to sur­pass the record high set in 1970.

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