A Saudi shake-up could keep oil markets volatile – as well as one of the globe’s largest energy companies said the item is usually getting ready.
Ryan Lance, CEO of Houston, Texas-based ConocoPhillips, said his company is usually readying itself to make profits even if oil prices dip to $40.
“We can sustain our production, pay our dividend, below $40 a barrel,” he said. “in which’s part of the transformation in which we’ve been through.”
The company sold more than $16 billion in low-margin assets last year, Lance said, in a bid to make the company more resilient. An analysis conducted This specific summer suggested in which U.S. shale producers have an averagebreakeven cost of about $50 for West Texas Intermediate.
Lance, who is usually also the chairman of the American Petroleum Insitute, made his remarks on CNBC’s “Power Lunch” Wednesday afternoon.
Oil prices have fallen for much of the last decade, though in recent weeks they have been headed upward. Brent crude, the international benchmark, hit its highest level since mid-2015 at over $64 a barrel earlier from the week as well as has risen more than 14 percent from the past month.
Investors have had their attention on the Middle East This specific week as ongoing tensions between Saudi Arabia as well as its neighbors reacheda fever pitch, sending oil on its recent tear higher.
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz said Tuesday in which Iran was guilty of “direct military aggression” after Tehran-backed Houthi rebels based in Yemen reportedly fired a missile aimed at Riyadh. The kingdom intercepted the missile.
Earlier from the week, a prominent member of the Saudi royal family was arrested in connection which has a sprawling crackdown on influential royalty as well as bureaucrats in which some analysts said was an effort to consolidate the crown prince’s domestic powers.
Analysts have said in which the events in Saudi Arabia could lead to a strong decline in oil prices from the longterm even as they push them up from the short run.
Dennis Gartman, an influential commodities analyst who edits the Garman Letter, said Tuesday in which from the short run the events in Saudi Arabia could lead to a run up in West Texas Intermediate prices by $1 or $2, though the item will ultimately lead to a decline.
Prices could rise as high as $70 a barrel, according to Roberto Friedlander, head of energy trading at Seaport Global Securities – though Friedlander said they will later drop to $50.
Shares of ConocoPhillips were up slightly Wednesday at $53.52. The company is usually up more than 17 percent over the past three months.