U.S. oil and gas production in the third quarter of 2017 is expected to increase for a fourth quarter in a row, according to the latest Federal Reserve Bank of Dallas Energy Survey of upstream industry executives in the region.
The Oil & Gas Journal on Friday quoted the survey as saying that the oil production index would rise to 19.3 in the third quarter from 10.2 in the second quarter, while the natural gas production index would rise to 17.3 from 10.6.
The third-quarter oil and gas activity in the Eleventh Federal Reserve District encompassing Texas, southern New Mexico, and North Louisiana is expected to expand for a sixth straight quarter, but growth may slow compared with the second quarter,
The survey’s business activity index — its broadest measure of conditions among Eleventh Federal Reserve District industry firms — fell to 27.3 in the third quarter from 37.3 in the second quarter. Positive readings in the survey generally indicate expansion, while readings below zero generally indicate contraction.
A little more than half of responding oil and gas executives said Hurricane Harvey had a slight negative impact on their business. However, most respondents expect that their business will not be negatively affected six months from now.
When asked about where they think U.S. crude oil production will stand at the end of 2018, 30 percent of respondents said they see it between 9.5-9.99 million barrels per day and 39 percent said they see it between 10-10.49 million barrels per day.
On average, respondents expect West Texas Intermediate (WTI) oil prices to be at 50.20 dollars a barrel by year-end, with responses ranging from 40 dollars a barrel to 63 dollars a barrel. WTI spot prices averaged 49.91 dollars a barrel during the survey collection period.
The survey data were collected on Sept. 13-21. Of the respondents, 78 were from exploration and production firms and 65 were from oil field services firms.