In a recent research note released on Tuesday, Goldman Sachs predicts strong growth in oil production within the Permian Basin, the largest oilfield in the United States. The bank highlights that this growth, coupled with ample spare capacity within OPEC, is likely to uphold the upper boundary of their Brent crude price forecast range of $75 to $90 per barrel in the near term.
Looking forward, Goldman Sachs acknowledges that while the Permian Basin’s production is expected to continue expanding, the pace is anticipated to taper off gradually. Specifically, production, which surged by 520,000 barrels per day in 2023, is projected to stabilize at a robust 270,000 barrels per day by 2026 as the basin matures.
The research also notes that the Permian rig count is anticipated to remain relatively steady throughout this year, with a slight decline anticipated to bring it below 300 rigs by the end of 2026. This trend reflects ongoing capital discipline among U.S. producers.
Currently, the Permian formation, spanning West Texas and eastern New Mexico, reports a total oil and gas count of 309, according to data from Baker Hughes, an energy services firm.
Goldman Sachs underscores that geological constraints will continue to exert limitations on the initial production growth of new wells, ultimately tempering the basin’s long-term production potential.
The analysis provides valuable insights into the dynamics shaping one of the most critical oil-producing regions globally, emphasizing both short-term bullish indicators and longer-term considerations for the Permian Basin’s oil market outlook.
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