U.S. crude oil production is not expected to rise much next year from the current levels of around 8.6 million bpd, energy mogul Harold Hamm said at the S&P Global Platts Global Energy Outlook Forum on Thursday.
If the United States were to go all out with oil production, it could probably double to 20 million barrels per day, according to Hamm, but that it would be “foolish for us to do that” precisely because it would create an oversupply.
According to Hamm — chairman and CEO of Continental Resources and Donald Trump’s energy advisor — U.S. production needs around 18 months to recover to 2015 highs if oil prices remain at US$50-55. Hamm also said that it seems that OPEC is targeting oil prices at between US$50 and US$65 per barrel.
Referring to the $50 to $55 price range, Hamm said, “At those prices it’s going to be slow. You need about 18 months before you see some recovery [in US crude production] at $50-$55 oil.”
“I don’t see it changing meaningfully from this year,” the energy tycoon said, when asked to predict the U.S. crude production for next year.
Following the oil price crash, U.S. production slumped from an average 9.42 million bpd in 2015 to an expected average production of 8.86 million bpd for 2016, according to the U.S. Energy Information Administration’s (EIA) latest Short-Term Energy Outlook out earlier this week. The EIA expects next year’s U.S. crude oil output to average 8.78 million bpd.
Hamm called the OPEC deal that lifted prices wise on their part, but that OPEC’s previous attempt to out-stay and out-pump the U.S. may have been harder on the Saudi’s than it was on the U.S.
“They helped us,” Hamm said in reference to the Saudi’s attempt to drive the United States out of the oil business. Hamm’s company, Continental Resources, is able to produce double the amount of oil as it could two years ago, and at the same cost, according to Hamm.
Commenting on the crude oil production, especially in the U.S., the EIA said that output has proven more resilient than expected and this was reflected in the companies’ financial conditions lately.
Hamm, who saw his oil & gas holdings rise US$3-billion in value in just three short hours on the day OPEC announced it had reached a deal to cut the cartel’s oil supply, has recently said he would not be taking a job offer to be America’s next Energy Secretary.