The oil and gas sector continued its strong growth in Q2, according to executives polled by the Dallas Fed in its most recent survey published on Wednesday.
The survey's broadest measure of conditions facing energy firms-also known as the business activity index-remains high at 53.0.
But there's more good news for the U.S. oil and gas sector-a sector that is facing extreme pressure from a particularly green administration, environmentalists, activist shareholders, and the IEA's calls for a net-zero world by 2050.
U.S. oil production has increased, according to surveyed executives from E&P firms. The oil production index rose from 16.3 in Q1 2021 to an astonishing 35.0 in Q2. It is the second-highest score since the survey was instituted back in 2016.
U.S. gas production has also increased, according to the survey, with the gas production index rising from 16 to 35.0.
The capital expenditure index increased from 31 to 42.4 among E&P firms, and executives polled expect this to rise. The index for the expected level of capital expenditures for 2022 came in at 53.0.
Costs are also on their way up, with the index for finding and development costs rising from 3.9 in Q1 to 28.3 in Q2 among E&P firms.
Oilfield services firms also saw across the board improvements. Operating margins improved, and prices received for services also rose.
Most importantly, the six-month outlook has improved considerably. The index for this climbed from 70.6 in Q1 to 71.9-the highest score ever.
Those surveyed pegged WTI at $70 by the end of 2021, with responses ranging from $49 per barrel to $85 per barrel. HH nat gas prices are expected at $3.10 MMBtu at year end.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More