Upbeat survey suggests rise in US oil and gas production
London (Quantum Commodity Intelligence) - Investment and production of oil and gas accelerated in the Permian basin in the second quarter and confidence in the market rose, according to an upbeat survey of energy executives by the Dallas Federal Reserve.
The already buoyant six-month outlook in the first quarter, when the world was eyeing the end of the Covid pandemic, nudged up from 70.6 points to 71.9 points in the second quarter, the highest in the survey's five-year history.
On average, the oil and gas executives expected WTI crude prices of $70/b by the end of 2021, around where they are now, and responses ranged from $49/b to $85/b.
Henry Hub natural gas prices were expected to be $3.10 MMBTU by the end of the year.
The oil production index rose from 16.3 points in the first quarter to 35 in the second quarter, its second-highest reading since the survey's inception in 2016, while the natural gas index bounded from 16 to 35.
The index for current capital expenditure rose from 31 in the first quarter to 42.4 points in the second quarter, and the expected level of capital expenditure next year rose from 49.5 to 53.
But costs are rising.
Among oilfield service firms, the index for input costs jumped from 36 to 56 points.
The survey was conducted between June 9 and 17, and 152 energy firms from the eleventh district of Texas, southern New Mexico and northern Louisiana took part. Of the respondents, 101 were exploration and production firms and 51 were oilfield services.
