Shale CEO Sees Producers Staying Disciplined at $70 Crude Oil

(Bloomberg) -- America’s shale producers will keep output in check even as global crude oil prices near $70 a barrel, Ovintiv Inc. Chief Executive Officer Doug Suttles said in an interview with Bloomberg Television.

Explorers are focused on low growth, strong operating performance and returning cash to shareholders, Suttles said. Ovintiv is prioritizing paying down debt and maintaining its dividend, he said.

Private operators’ ability to weigh on oil prices by ramping up production is limited after recent tie-ups with publicly traded companies, Suttles said. While closely held producers have more influence on the natural gas market, “it’s a little bit of a concern, not a big one,” he said.

Suttles said he doesn’t expect taxes to rise significantly for the oil industry, even after the Biden administration directed federal agencies to eliminate fossil fuel subsidies. Abolishing tax incentives that support fossil fuel development, such as deductions for intangible drilling costs, would require action by Congress.

“It’s reasonable that there may be some increase, but I think it will be very modest,” Suttles said.

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