Most US oil executives see prices below $60 per barrel through 2018

Nearly two-thirds of U.S. oil executives see crude oil prices remaining below $60 per barrel through 2018 and not hitting $70 until at least the next decade.

This year's more dour view, especially among shale industry managers, comes as executives are focusing on cost controls and returns and have largely stopped looking for a rise in commodity prices. This new paradigm is encouraging shale producers to base executive compensation on the best uses of capital, a strategy designed to keep costs low.

"The bottom line is that companies should focus on cost discipline and operational efficiency," said Andrew Slaughter, head of Deloitte's Center for Energy Solutions.

Half of executives polled said they expect capital spending to drop next year, and nearly 60 percent said they expect a decline in the number of drilling rigs active across the United States.

Production in the shale industry requires constant investment to keep up with well decline rates. Those polled said they expect to maintain or increase current production levels into 2018, though a drop in spending could prevent any sizable increase in U.S. output, helping to resolve a global supply and demand imbalance.

That would fit well into a plan by the 14-member Organization of the Petroleum Exporting Countries, which on Wednesday forecast higher demand for its oil in 2018 and a worldwide supply deficit.

Source: Bloomberg Pro Terminal

Trader Bozhidar Arabadzhiev

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