WTI crude oil touched $74.99 a short time ago but sagged into settlement at $73.67, finishing about 80-cents higher on the day in a choppy session.
Pioneer Natural Resources CEO Scott Sheffield was just on CNBC making the bull case for oil. He argued that the model for shale is changing, with companies focused on mitigating decline rates and preserving acreage rather than growing.
Sheffield predicts shale growth will slow to about 300k bpd in the next two years. Earlier today, Sheffield also got some attention for warning that Permian production would top out at around 7 mbpd in 2030, below the 8 mbpd per day he previously forecast. He warned companies are moving to tier 2 and 3 inventory.
"There's no extra supply in the next 5-7 years and demand is going to come back," he said, predicting that $150 was more likely in that timeframe than $60 oil. $150 's the level where he sees demand destruction.
This is one of the most-important charts in the world right now. It shows that companies aren't drilling in much of the supposed basin, suggesting the oil just isn't there.
He also warned that gas-oil ratios are going to go up.
