President Donald Trump’s push for a new oil boom faces resistance from Wall Street, according to warnings from shale industry leaders.
The forecasted increase in total US oil output during Trump’s second term is less than 1.3 million barrels per day, falling short of the 1.9 million b/d rise seen under Joe Biden and significantly lower than the output growth during the shale boom years in the previous decade, as reported by Rystad Energy and Wood Mackenzie.
Shale executives cite investor pressure and economic realities dictated by oil prices as major obstacles in Trump’s vision of achieving “American energy dominance.”
Wil VanLoh, CEO of Quantum Energy Partners, a major investor in the shale sector, expressed doubt that companies would simply ramp up drilling activities due to financial constraints set by Wall Street.
Trump’s optimism in lowering US inflation by increasing oil supply may be challenged by the current market conditions where lower oil and gas prices could hinder the profitability of shale companies, making them less inclined to heed the president’s call to “drill, baby, drill.”
Despite executive orders signed by Trump to boost oil and gas supplies and declare a “national energy emergency,” industry experts anticipate minimal impact from the administration’s pro-fossil fuels policies and regulatory rollback.
As the industry faces softer crude prices and high production costs, the likelihood of a significant increase in drilling activity remains uncertain.
According to experts, market conditions and investor demands will play a crucial role in shaping the future trajectory of the US oil and gas sector.
After experiencing record-high oil production in the previous year, the Energy Information Administration projects a modest growth rate in output until 2026 attributed to price pressures and saturation of prime drilling locations.
Concerns over diminishing reserves and stricter financial constraints are prompting shale producers to adopt a more cautious approach despite Trump’s pro-energy stance.
The shift towards cost-efficiency and profit maximization is reflected in the financial decisions of major players like Chevron, which plans to cut spending while others like Exxon seek to increase capital expenditures.
Industry experts note that shareholder demands and market dynamics will continue to influence the strategic direction of oil and gas companies, ultimately shaping the future of the sector.
