Maintaining oil production will be the top priority for U.S. oil drillers for the next six months, according to the latest installment of the Dallas Fed quarterly energy survey. According to it, 19 percent—the biggest portion of respondents—were most focused on keeping production at current levels.
Production growth, on the other hand, is a top priority for 16 percent, the survey found. That’s the same percentage as respondents who said their top priority is reducing debt. Another 16 percent said their top priority for the next six months was finding additional sources of capital.
Interestingly enough, divestiture was the least popular top priority: less than 8 percent of respondents prioritized that. Cost reduction was the top priority for 8 percent, and asset acquisition was the top priority for 12 percent of the respondents in the survey.
In oilfield services, the priority picture was different. Close to a third of the respondents from this segment said their top priority for the next six months was growing their business, with slightly less prioritizing the keeping of business activity at current levels. Cost reduction came next, with some 10 percent of respondents noting it as their top priority. Debt reduction was an option picked by less than 10 percent.
Another highlight from the latest Dallas Fed survey is the finding that the majority of oil executives believed U.S. oil production has peaked. As much as two-thirds of respondents shared this belief. An even larger majority thought that OPEC will come to play a more prominent role in determining oil prices going forward. Some 74 percent of respondents shared this belief.
Speaking of prices, it seems like it will be a while yet before the U.S. rig count begins to increase meaningfully. According to 43 percent of Dallas Fed survey respondents, the rig count would only increase substantially when WTI reaches $51-55 a barrel. Another 29 percent believed the rig count will start rising steadily when WTI reached $56-60, and only 11 believed drillers would start adding rigs at WTI prices of below $50 a barrel.
By Irina Slav for Oilprice.com
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