‘Spending binge can kill oil market’
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.
The United States says it expects domestic oil output next year to surpass the record high set in 1970.