US shale production is largely shielded from dipped oil prices, the chief executive of Dow Chemical said.
Andrew Liveris, was speaking at a conference in Dubai, when he explained the majority of well and production investments in the US shale market had already been made, allowing the sector to withstand the falling crude prices.
“They’re not shutting in because that’s all ’sunk costs,’” he said of US shale producers.
“So you’re not going to get a lot of producers stopping at 75-buck oil.”
Brent has dropped more than 30% this year. However, the oil price has recently experienced a three-day lift ahead of OPEC’s meeting later this week.
OPEC is said to be divided on whether or not to cut output in a bid to fuel price recovery.
Liveris, who heads the largest US chemical maker, also has another factor working in his favour. As well as leveraging oil and natural gas to produce finished goods, the firm also has a full portfolio of other products.
He later added: “Right now we don’t mind low oil because we make money in other businesses.”
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