London October 29 2022: The price of oil could rebound and reach $120 a barrel of next year when China reopens its economy from coronavirus-related lockdowns, said the boss of Pioneer Natural Resources Co., one of the biggest producers in the Permian Basin in the US.
Crude prices have declined over the summer as Chinese lockdowns hurt consumption. Brent, the international benchmark, traded Friday at around $96 a barrel.
“I still think they will probably get back to $120, sometime mid-next year, once China opens up,” Scott Sheffield said in a Bloomberg Television interview. He didn’t say if he was referring to Brent or West Texas Intermediate, the US benchmark price.
Sheffield also said China’s growing energy infrastructure could surpass the US if the country doesn’t invest more in areas such as pipelines and liquefied natural gas terminals.
President Joe Biden has asked US oil companies to produce more. But Sheffield said companies are running out of locations to drill, and it “takes two years to respond to drilling more.”
To ramp up domestic production, Sheffield added, Biden needs to speak not just with companies like his, but also with shareholders and financial players who fund the industry.