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$87.91 per barrel.
That was the average response of executives from 146 oil and gas firms when asked where they expect the West Texas Intermediate (WTI) crude oil price to be at the end of the year, as part of the latest Dallas Fed Energy Survey, which was released this week.
The low forecast came in at $70 per barrel, the high forecast came in at $120 per barrel, and the price of WTI during the survey was $90.29 per barrel, the survey highlighted.
In the third quarter Dallas Fed Energy Survey, around 27 percent of respondents expected the WTI price to be between $85 and $89.99 per barrel at the end of the year and over 25 percent of respondents expected it to come in at between $90 and $94.99 per barrel.
In the second quarter Dallas Fed Energy survey, the average response to the same question was $77.48 per barrel. The low forecast in that survey was $60 per barrel, the high forecast was $100 per barrel, and the price during the survey was $69.89 per barrel, according to that survey, which outlined that executives from 151 oil and gas firms answered the question.
The average response in the first quarter survey, which saw executives from 145 oil and gas firms answer the question, was $79.64 per barrel. The low forecast in the first quarter survey was $50 per barrel, the high forecast was $160 per barrel, and the price during the survey was $68.51 per barrel, the first quarter Dallas Fed Energy Survey highlighted.
According to its latest short term energy outlook (STEO), which was released earlier this month, the U.S. Energy Information Administration (EIA) expects the WTI spot price to average $87.68 per barrel in the fourth quarter of this year and $79.65 per barrel for the whole of 2023.
In its previous STEO, which was released in August, the EIA projected that the WTI spot price average would be $82.65 per barrel in the fourth quarter and $77.79 per barrel for the whole of 2023. Both STEOs place the 2022 WTI spot price average at $94.91 per barrel.
In a report sent to Rigzone this week, Standard Chartered projected that the NYMEX WTI price would average $91 per barrel in the fourth quarter of this year and $88 per barrel for 2023 overall. The company anticipated the exact same prices for NYMEX WTI in a separate report sent to Rigzone at the end of August.
In another report sent to Rigzone this week, BofA Global Research revealed that its commodity team upped its second half 2023 WTI average assumption from $76 per barrel to $86 per barrel.
At the time of writing, the price of WTI crude oil is trading at $91.70 per barrel. The commodity has risen from a close of $67.7 per barrel on June 27.
Dallas Fed Survey
The Dallas Fed conducts the Dallas Fed Energy Survey quarterly to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District, the organization notes on its website.
Activity in the oil and gas sector rose in the third quarter, according to oil and gas executives responding to the Dallas Fed Energy Survey, the Dallas Fed highlighted in the latest report.
“The business activity index, the survey’s broadest measure of conditions energy firms in the Eleventh District face, increased from 0 in the second quarter to 10.9 in the third quarter,” the Dallas Fed noted in the survey.
“The increase was driven by the exploration and production (E&P) side of the business. The business activity index for E&P firms jumped from 1.0 in the second quarter to 22.5 in the third quarter. However, the business activity index for oil and gas support services firms declined from -1.9 to -12.2,” the organization added.
The Dallas Fed revealed in the survey that the oil production index increased from 8.0 in the second quarter to 26.5 in the third, and that the natural gas production index rose from 2.1 to 15.4. Firms also reported rising costs for an 11th consecutive quarter, according to the Dallas Fed.
“Among oilfield services firms, the input cost index remained positive but declined from 41.2 to 33.4. Among E&P firms, the finding and development costs index edged up from 14.9 to 18.3. Additionally, the lease operating expenses index was essentially unchanged at 25.6,” the Dallas Fed said in the survey.
“Oilfield services firms reported continuing deterioration in most indicators. The equipment utilization index remained negative but edged up from -7.9 in the second quarter to -4.2 in the third. The operating margin index declined from -21.6 to -30.7. The index of prices received for services was relatively unchanged at 2.1,” it added.
In the latest survey, the Dallas Fed also noted that the aggregate employment index posted an 11th consecutive positive reading but declined from 13.1 in the second quarter to 5.5 in the third.
“While the aggregate employment index was positive, the single digit reading indicates employment was little changed from the prior quarter,” the organization said in the survey.
“The aggregate employee hours index was relatively unchanged at 9.6. Meanwhile, the aggregate wages and benefits index declined from 34.5 to 24.5,” it added.
The Dallas Fed also highlighted in the survey that the company outlook index moved into positive territory in the third quarter, “jumping from -9.1 to 36.0”.
“Optimism was more pronounced among E&P firms; the outlook index was 46.8 for E&P firms compared with 14.9 for services firms,” the organization noted in the survey.
“The overall outlook uncertainty index remained positive but plunged 30 points to 6.8, suggesting that while uncertainty continued to increase on net, fewer firms noted a rise in the recent quarter,” it added.
To contact the author, email andreas.exarheas@rigzone.com
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