Crude at $120 Would Hit Demand, Devon CEO Says
(Bloomberg) -- Oil can rise about $25 more per barrel before high prices start weighing down consumption, according to the top executive at shale explorer Devon Energy Corp.
“I still think you could see the commodity continue to move higher before you start seeing that demand destruction,” Chief Executive Officer Rick Muncrief said in an interview on Bloomberg TV. “I personally don't think you'd see much demand destruction until we saw WTI of $120 or somewhere in that range.”
For now, oil hovering just under $100 a barrel has been a boon for U.S. producers, who've been keeping investors happy with a mix of record free cash flow and production discipline. Devon isn't looking to break ranks to bring on new output faster than promised.
“The market is tight, let's be patient, let's be disciplined,” Muncrief said, citing Devon's message to shareholders. “We are still recovering from a pandemic; we can't forget that.”
That said, the company would be open to discussing with the Biden administration the possibility of boosting oil output to help contain the surge in gasoline prices and inflation, he said.
“I'm a little mystified that there hasn't been some dialog,” Muncrief said in a separate interview with Bloomberg News in New York on Monday. “If they were to reach out and maybe be a little more collaborative, it might provide some cover.”
©2022 Bloomberg L.P.
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