A drilling crew member on an oil rig within the Permian Basin close to Wink, Texas. 

Nick Oxford | Reuters

The U.S. will preserve its oil manufacturing — and even ramp it up greater — regardless of low power costs and slowing financial progress, Deputy Vitality Secretary Dan Brouillette mentioned Wednesday.

Shale producers within the U.S. will proceed to provide a file 12 million barrels a day all through subsequent yr, he mentioned, citing projections from the Vitality Data Administration. They could even go as much as as excessive as 13 million barrels, he added.

“U.S. production numbers are going to continue for quite some time,” Brouillette instructed CNBC.

U.S. West Texas Intermediate (WTI) crude futures have fallen nearly 20% since reaching their 2019 peaks in late April, as oil costs have been dragged down by intensifying fears of an financial downturn that is began to impression oil consumption.

However Brouillette rejected fears that oil demand can be hit amid slowing progress.

“Growth is slowing down slightly … over the course of early 2019. But I suspect that as the economy begins to rev up, we’ll start to see that demand pick up as well. And it’s going to be good news for oil producers,” he mentioned.

On Wednesday, Brent crude futures have been at $61.34 per barrel, and U.S. crude futures have been at $52.40 per barrel — off this yr’s highs of round $74 and $66 per barrel in April.

Our greatest problem in the USA will not be sustaining manufacturing, it is truly getting the product to market. We’re growing infrastructure … at a speedy tempo, however we have to do extra.

Dan Brouillette

U.S. Deputy Vitality Secretary

Although shale drillers within the U.S. have been mentioned to face obstacles on rising output amid a wave of belt-tightening that is slicing billions of {dollars} from budgets, and the variety of working oil rigs have declined this yr, Brouillette mentioned that manufacturing will not be truly the largest drawback.

“Our biggest challenge in the United States is not maintaining production, it’s actually getting the product to market. We are developing infrastructure … at a rapid pace, but we need to do more. We need more pipeline capacity in order to have the oil and the gas reach these export markets,” he mentioned.

The truth is, Brouillette mentioned, there can be elevated manufacturing, not falling output, within the U.S.

Final yr, the worldwide urge for food for pure fuel grew on the quickest tempo since 2010. Most of that offer is anticipated to come back from the U.S., amid its ambitions to be a prime liquefied pure fuel (LNG) exporter.

American fuel output surged by 11.5% in 2018 — marking the quickest progress since 1951, in keeping with the Worldwide Vitality Company. At present, Australia and Qatar are the highest two exporters of LNG, which is a type of the gas chilled to liquid for transport by sea.

However amid the commerce conflict, Chinese language tariffs on U.S. pure fuel may put Washington’s ambitions on maintain, with the Asian big accounting for a big share of world demand and taking the spot because the world’s quantity 2 importer for LNG.

Brouillette dismissed that notion, nevertheless, pointing to excessive demand from the remainder of Asia.

He mentioned that gross sales to South Korea and Japan look “very, very large” relative to China. With Mexico numbers added to that tally, “the future looks pretty bright,” he added.

“We still see continued LNG export growth all throughout the world,” Brouillette added.

— CNBC’s Tom DiChristopher contributed to this report.

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