A new survey by law firm Haynes Boone LLC suggests that banks expect oil prices to drop below $60 a barrel by the middle of President-elect Donald Trump’s new term. According to Bloomberg’s report on Monday, the survey, which included 26 bankers, predicts that West Texas Intermediate (WTI) oil prices will fall to $58.62 a barrel by 2027, a significant decline from the current price of $69.87 as of Wednesday morning.
Trump has vowed to push shale oil producers to increase output, even if it means they “drill themselves out of business.” However, it remains unclear how he plans to achieve this, as U.S. oil production is largely driven by independent companies, rather than a national oil company. Exxon Mobil’s Upstream President, Liam Mallon, recently expressed doubts about a major increase in production under a second Trump term. He stated last week at a London conference, “I think a radical change is unlikely because the vast majority, if not everybody, is primarily focused on the economics of what they’re doing.”
In addition, analysts at Standard Chartered are closely watching the potential policy direction under Trump’s administration, particularly following the nomination of Scott Bessent as Treasury Secretary. Bessent’s recent speech at a Manhattan Institute event in June, titled ‘Towards a New Supply-Side: The Future of Free Enterprise in the United States’, is being examined as a potential blueprint for future energy policies.
Currently, U.S. oil and gas production stands at approximately 40.7 million barrels of oil equivalent per day (mboe/d). Since 2015, production has increased by an average of 123,000 barrels per day. Adding another 3 million barrels of daily output would take less than two years at this rate. However, Standard Chartered analysts note that most of the increase since 2015 has come from natural gas (41%) and natural gas liquids (28%), with crude oil contributing just 28%. They predict that future growth in crude oil production will be limited, and natural gas is likely to play a larger role in meeting the new administration’s energy goals.
Meanwhile, Morgan Stanley has forecasted a new growth cycle for the U.S. natural gas market, driven by rising demand for liquefied natural gas (LNG) exports and increased electricity consumption.
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