Oil prices will rise to $60 a barrel next year, Texas oil commissioner Ryan Sitton told attendees Wednesday at NAPE, the nation’s expo for buying and selling oil and gas land.
Sitton, one of several speakers at the summer conference formerly known as the North American Prospect Expo, lauded the historic rise in Texas oil production and the state’s role in the global oil economy. Texas, he said, produces one-third of the nation’s oil. And production in the state grew faster than that of Russia and Saudi Arabia combined during recent years, he said.
The world consumes more than 90 million barrels of oil a day, according to the International Energy Agency. Two years ago, it was producing 2 million more barrels a day than it was consuming, Sitton said, creating the oversupply that drove down prices. But oil production has since dropped by about 1.5 million barrels a day among U.S. and Venezuela alone, Sitton said. And per capita demand keeps growing in nations like India and China.
In addition, he said, only about 65 million barrels of oil a day can be produced profitably at $40 a barrel. And yet he can’t imagine that businesses will continue pumping oil and losing money in production.
“Unlike any point in history, today, all the fundamentals point to prices going up,” Sitton said. “I’m going to make a bold prediction: I believe we will see $60 a barrel next year.”
Texas, Sitton said, is poised to rebound during that rise. No other region in the world has such accessible land and so many miles of pipelines.
“We can move product around this state quicker and more dynamically than anywhere,” Sitton said. “Texas can do that better than anyone else in the world.”