A Texas oil industry regulator expects crude oil prices to eclipse $60 per barrel by next year as global supply and demand balance, a price that would again make production profitable across the largest producing U.S. state.
Any rise in oil prices would be a welcome relief to Texas energy companies, especially those who operate in the Eagle Ford shale region, where production has slumped with prices slumped near $43 per barrel.
“Pretty much every single fundamental that we have points to those commodity prices going up, not down,” Ryan Sitton, one of three elected members of the Texas Railroad Commission, said in an interview on Monday.
“I fully expect to see $60 a barrel oil, and then some, next year,” said Sitton, who will be a keynote speaker at the NAPE conference in Houston later this week, a gathering of oil and gas investors.
In Texas alone, Sitton said, state regulators are processing less than a third of the oil and gas well permits they did just two years ago, highlighting the wariness companies have to drill and pump more.
The inaction mirrors North Dakota and other large oil producing parts of the United States, where production has slipped from recent highs.