XOM - Tracking the shale discipline narrative - haves grow production have nots don't

With shale oil production having overwhelmed global demand growth, causing two industry downturns preceding the pandemic, investors were comforted by comments from Pioneer's (NYSE:PXD) CEO in December 2021 (NYSEARCA:USO). In an appearance on CNBC, CEO Scott Sheffield told the world his company, wouldn't grow production more than 5%, and it wouldn't matter if oil was $150. Mr. Sheffield said he was committed to shareholder returns, and he wouldn't go back on his word. WTI closed at ~$72 the day Sheffield's comments were released.  Coming from one of the largest, lowest-cost shale producers, 5% felt more like a growth ceiling than a floor. According to the DOE's drilling productivity report, major shale basins produce ~8mb/d, so 5% growth penciled out to ~400kb/d of additional production for 2022. Oil market strategists saw the move towards shale supply discipline as bullish and raced to lift oil price forecasts for 2022, with Goldman, Morgan Stanley

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Tracking the shale discipline narrative - haves grow production, have nots don't