Executives from oil and gas firms have revealed where they expect the West Texas Intermediate (WTI) crude oil price to be at various points in the future as part of the first quarter Dallas Fed Energy Survey, which was released recently.
The survey showed that the average response executives from 145 oil and gas firms gave when asked what they expect the WTI crude oil price to be at the end of 2024 was $80.11 per barrel. The low forecast in the survey was $70 per barrel, the high forecast was $120 per barrel, and the WTI price during the survey was $82.52 per barrel, the survey highlighted.
In the previous fourth quarter Dallas Fed Energy Survey, which was released in December last year, the average response executives from 143 oil and gas firms gave when asked the same question was $77.68 per barrel. The low forecast in that survey was $51 per barrel, the high forecast was $110 per barrel, and the WTI price during the survey was $69.77 per barrel, that survey highlighted.
The latest Dallas Fed Energy Survey also asked participants where they expect WTI prices to be in six months, one year, two years, and five years. Executives from 135 oil and gas firms answered this question and gave a mean response of $79 per barrel for the six month mark, $81 per barrel for the year mark, $83 per barrel for the two year mark, and $90 per barrel for the five year mark.
This question was not posed in the fourth quarter Dallas Fed Energy Survey.
In the latest Dallas Fed Energy Survey, exploration and production firms were also asked what WTI oil price their firm needs to cover operating expenses for existing wells in the top two areas where they are active.
Executives from 91 exploration and production firms answered the question. The average price across the entire sample is approximately $39 per barrel, up from $37 last year, the survey noted.
“Across regions, the average price necessary to cover operating expenses ranges from $31 to $45 per barrel. Almost all respondents can cover operating expenses for existing wells at current prices,” the survey stated.
“Large firms (with crude oil production of 10,000 barrels per day or more as of the fourth quarter of 2023) require prices of $26 per barrel to cover operating expenses for existing wells, based on the average of company responses. That compares with $44 for small firms (fewer than 10,000 barrels per day),” it added.
The first quarter Dallas Fed Energy Survey also asked exploration and production companies what WTI oil price their firm needs to profitably drill a new well in the top two areas where they are active.
Executives from 87 exploration and production firms answered this question. For the entire sample, firms need $64 per barrel on average to profitably drill, higher than the $62 per barrel price when this question was asked last year, the survey stated.
“Across regions, average breakeven prices to profitably drill range from $59 to $70 per barrel. Breakeven prices in the Permian Basin average $65 per barrel, $4 higher than last year,” it added.
“Almost all firms in the survey can profitably drill a new well at current prices. (The WTI spot price was $83 per barrel during the survey period,” it continued.
“Large firms (with crude oil production of 10,000 barrels per day or more as of the fourth quarter of 2023) require a $58-per-barrel price to profitably drill, based on the average of company responses. That compared with $67 for small firms (fewer than 10,000 barrels per day),” the survey went on to state.
In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) projected that the WTI spot price will average $77.08 per barrel in the first quarter of 2024, $83.30 per barrel in the second quarter, $84.50 per barrel in the third quarter, $83.50 per barrel in the fourth quarter, and $82.15 per barrel overall in 2024.
In that STEO, the EIA forecast that the commodity will average $82.84 per barrel in the first quarter of 2025, $81.50 per barrel in the second quarter, $79.50 per barrel in the third quarter, $77.50 per barrel in the fourth quarter, and $80.30 overall in 2025.
Standard Chartered projected in a report sent to Rigzone this week that the NYMEX WTI basis nearby future price will average $91 per barrel in the second quarter of 2024, $95 per barrel in the third quarter, $103 per barrel in the fourth quarter, $104 per barrel in the first quarter of 2025, $100 per barrel in the second quarter.
The company forecast that the commodity will average $106 per barrel overall in 2025, $125 per barrel overall in 2026, and $112 per barrel overall in 2027.
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