Data: Federal Reserve Bank of Dallas; Chart: Axios Visuals
A new survey of oil and gas executives offers data points that explain why U.S. oil production won't approach its record pre-pandemic level anytime soon — if ever.
Driving the news: The Dallas Fed's quarterly survey asked 108 companies the U.S. oil price that would really juice new drilling. As you can see from the chart above, it's well above $39.90 where it's at this morning.
- And 66% of executives surveyed believe U.S. production has peaked, a finding Reuters explored more here.
- The Dallas Fed took the pulse of firms in the region that includes the prolific Permian Basin of Texas and New Mexico.
Why it matters: The report offers the latest look at the pandemic's reshaping of oil markets and ongoing struggles, even though prices have come back from their April nadir.
- U.S. production was at an all-time record of around 13 million barrels per day, the largest in the world, at the beginning of the year.
- It's now well under 11 million barrels per day amid the COVID crisis that has greatly lowered global demand.
Yes, but: some "drilled but uncompleted" wells will come back at lower prices than producers generally need for new wells.
- "Thirty-six percent of executives said they expect a substantial increase in the completion of DUCs if oil prices were $46–$50 per barrel."
- And just as many respondents signaled interest in growing production as in reducing debt, though "maintain production" was the most popular goal.
