The oil and gas industry is being warned about ramping up too quickly in the Permian Basin as oil prices hang around the $55 a barrel level.
At a post-earnings call on Wednesday, Kinder Morgan’s president Kim Dang admitted there are concerns about the industry trying to claw too quickly back to pre-COVID-19 pandemic production.
Just last week, US energy firms added oil and natural gas rigs for an 8th consecutive week.
“By our calculations, you’re getting close to a rig level in the Permian that could get you back to flat volumes to where we were pre-pandemic,” Kim Dang, president at Kinder Morgan said.
“And so it’s not clear how much they would ramp up capex in response to increasing prices,” he added.
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