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Crude oil production growth in the U.S. slowed down significantly in the fourth quarter of the year from the prior three months, although natural gas production continued up.
According to the Dallas Fed Energy Survey, the production index for the industry dropped from 26.5 in the third quarter to just 5.3 in the current quarter. In natural gas, the index inched up 15.4 in the third quarter to 17.9 in the fourth.
Optimism among oil and gas executives about the future of the industry appears to be on the wane, the Dallas Fed reported, with capital spending plans for next year largely in line with this year’s or slightly above it. A third of the survey’s respondents said they will increase their spending modestly while 26% said they would keep it close to 2023 levels.
The Dallas Fed also asked about the oil price these companies were basing their 2024 budgets on and it seems the majority expects weaker prices for next year. The average response to that question was $71, with some 35% of respondents giving a range of between $70 and $75 per barrel.
When asked where they expected oil prices to be a year from now, the prevailing opinion was a little better, with the majority forecasting West Texas Intermediate will trade at between $75 and $80 per barrel at the end of 2024.
The industry also expects more large-size acquisitions after the two megadeals tying up Exxon and Pioneer, and Chevron and Hess Corp. Some 77% of the Dallas Fed survey respondents said they expected more acquisitions worth $50 billion or more next year.
As regards emission reduction and other transition-related activities, these were more popular among large producers, with small drillers generally having no plans to either reduce their emissions or invest in alternative sources of energy.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.