U.S. oil production will decline if the corporate-acquisition spree sweeping the shale sector is prolonged, according to a Federal Reserve Bank of Dallas survey.
More than 50% of oil executives told the Dallas Fed they foresee lower domestic crude output if the consolidation trend continues for five years, according to second-quarter survey results released June 26.
“Consolidation by E&P firms has curtailed investment in exploration,” an unidentified executive was quoted as telling the bank. “The last few years of mergers and acquisitions have decreased activity in the oil patch,” another said. About 48% expect “slightly lower” output and another 6% foresee “significantly lower” production.
Shale explorers are being closely watched by the OPEC+ alliance for any supply impacts from the recent wave of acquisitions. The sector’s $250 billion in announced takeovers in recent months make it less likely the U.S. will surprise the oil market like it did with last year’s unexpected million-barrel increase in daily output.
Full-year 2024 production is forecast to rise by about 310,000 barrels a day, according to the U.S. Energy Information Administration. The number of rigs drilling for oil is at the lowest since early 2022 while the number of deployed frack crews is about half what it was six years ago.
The Dallas Fed’s quarterly surveys are widely read for the anonymous comments that offer an unfiltered view on a range of topics impacting the oil industry. The bank’s region encompasses Texas, northern Louisiana and southern New Mexico.
Source: www.ttnews.com
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
- Energies Media Staffhttps://energiesmedia.com/author/oilmanwp/
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