Abu Dhabi, the United Arab Emirates – The Secretary in the United States of Energy, Chris Wright, is not worried about the fall in oil prices and their impact on the American shale industry, and stresses that the years to come should be a period of abundance of energy for the greatest world economy.
“The American shale industry will survive and prosper,” said Wright in an interview with Dan Murphy de CNBC in the capital of the United Arab Emirates, Abu Dhabi. “But of course,” he added, “investment decisions will be adapted if prices remain long to stay so low for a long time. But I am quite optimistic for American industry.”
Oil prices have undergone pressure in a decrease in global demand, increasing uncertainty about prices and greater supply on the market in OPEC and non -OPEP countries – with lower income threatening the viability of shale producers.
The June expiration contract of Benchmark Global Brent was negotiated at $ 63.51 per barrel on Friday at 1:43 p.m. in London, up 0.28% compared to Thursday's regulations. The month before can US WTI The contract was $ 60.26 per barrel, 0.32% higher compared to the closing price of the day before. The two contracts are down approximately 22% in the past year.
To assert its point of view, Wright referred to the period from 2014 to 2016, during which a boom in shale production coincided with the drop in global demand and lowered oil prices by 70%. The industry was forced to struggle with A raz of bankruptcy tidal.
But the energy secretary took an optimistic angle. “In 2015 and 2016, oil prices reached $ 28 (per barrel) twice, and what happened? What was the American shale industry at that time-innovating, becoming smarter, reducing their costs, and that's what's going on at the moment,” said Wright.
Analysts of raw materials believe that American crude must remain above $ 65 per barrel to keep the producers of shale in business. Goldman Sachs has reduced its oil price forecasts for US WTI this week to $ 58 a barrel by December 2025 and $ 51 per barrel by December 2026, against a previous prospect of $ 66 a barrel this year and $ 59 per barrel in 2026.
Wright himself is a former shale executive, having founded and served as CEO of the Denver-based petroleum service company, Liberty Energy until his resignations to join the administration of US President Donald Trump. Liberty Energy's course of action suffered in the middle of the slide from oil prices and trade tensions, with actions down more than 46% of one year.
The comments of the Energy Secretary come about a week after the OPEC alliance and its non -OPEC oil partners, known as OPEC +, have made the decision to accelerate its already planned gross production increases, adding more supply to an already saturated market. The decision made it possible to lower crude prices more.
In the long term, however, OPEC + members need higher oil prices to balance their budgets. On the other hand, Trump promised to “drill, baby, forest” to maintain prices for American consumers and has long been expressed that OPEC pumping members for this reason.
When asked if this could possibly put the United States and the OPEC on a collision trajectory, Wright replied in the negative.
“I do not at all think that it is a collision class. What we see, and what I saw here in the water, and you see in Arabia (Arabia) and in Qatar is a very long -term vision of energy,” said Wright.
“Yes, of course, there is an additional short -term reduction in income if you have lower oil and gas prices. But the investments that are made here and the relationships that are built here are decades in the future.”
Wright insisted that there was a global alignment in the energy strategies of the United States and its oil-rich Arab allies in particular, whose leaders must meet during his visit to the Middle East, who before a planned visit by Trump.
“The way of improving American lives and the citizens of the world is better, is greater energy, more affordable energy and just a much brighter and prosperous future,” said Wright. “This is the path on which we are. And I certainly think (the) Saudi water and Arabia and Qatar, I think we are all aligned in this mission.”
