Scott Sheffield, the chief executive of top U.S. shale producer Pioneer Natural Resources Co, on Tuesday said he worries oil prices could get too high and further roil markets after years underinvestment in the sector.
“I’m worried that it may get too high, above $100 (per barrel),” Sheffield said in an interview on the sidelines of a the World Petroleum Congress in Houston. The event brings together top energy executives and policy makers to discuss oil and gas technologies and market trends.
“I hope it stabilizes between a $80 to $100 range over the next several years. We need stability in the oil markets,” he said.
After crude oil prices jumped to around $85 a barrel in October, their highest since 2014, analysts projected oil could hit $100 a barrel in coming months as demand grows and pandemic cutbacks constrain supplies.
Fears the new Omicron coronavirus variant could hit demand recently pulled prices down. U.S. crude futures were trading at around $72 on Tuesday, regaining some of their losses on easing concerns over the Omicron variant.
U.S. shale producers have not added to production even as prices surged this year, unlike during past periods of high prices. In part, investors have pressured oil companies to restrain drilling and return more of their profits to shareholders.
Sheffield said Pioneer is holding firm on plans to grow its production by 5% in 2022, adding one to two rigs per year.
He also expressed surprise the Biden administration had not leaned on U.S companies to prop up production to lower prices.
“The Biden administration called up OPEC to increase production and didn’t ask the U.S. to do it,” he told Reuters, referring to White House calls for the oil producing group to pump more.
Sheffield said over the next decade he aims to convert its drilling, fracking and compression operations to electric, from diesel. Pioneer will work with other shale firms to build out the electric grid in the Permian Basin shale field to make wider conversions possible.
His company is also looking at carbon sequestration and building out wind and solar power on land Pioneer owns that could help power its operations.