(Bloomberg) -- Banks are gearing up for US oil prices to fall below $60 a barrel by the middle of President-elect Donald Trump’s new term in office, according to a survey from law firm Haynes Boone LLP.
West Texas Intermediate, the US benchmark, is expected to drop to $58.62 a barrel by 2027, the mean estimate of 26 banks participating in the survey that was released Wednesday. WTI settled at $69.94 yesterday.
Trump has said he’ll push shale producers to ramp up output, telling supporters pump prices will fall even if it means operators “drill themselves out of business.” Crude prices in the US have dropped about 2.4% so far this year amid concerns about a looming global surplus. While shale producers have pledged to slow growth, efficiencies are allowing them to produce more while spending less.
“If prices drop further, our experts wouldn’t be surprised if producers start paring 2025 budgets to curb drilling,” Alex Ljubojevic, director of Enverus Intelligence Research, said in a report this week.
Operators in the Permian Basin of West Texas and New Mexico could cut drilling rigs by roughly 10% next year to keep output flat in the world’s busiest shale patch, Enverus said.
©2024 Bloomberg L.P.