US EditionOil Executives Bemoan 'Uncertainty' Amid Price Pressures and Tariffs
- A mid-March 2025 Dallas Fed survey of 130 energy firms in the Federal Reserve's 11th District revealed a modest rise in oil and gas activity, but also growing uncertainty and slight pessimism among executives.
- This uneasiness stems from factors such as policy, geopolitics, and the administration's 'drill, baby, drill' agenda, which are putting pressure on commodity prices.
- While the average price per barrel grew to $65, up $1 from last year, costs jumped at a faster pace, with larger firms needing $61 per barrel to break even and $41 to cover operating expenses for existing wells, an increase of $2 from the previous year.
- The company outlook index decreased 12 points to-4.9 and the uncertainty index rose 21 points to 43.1, with one executive stating, "I have never felt more uncertainty about our business in my entire 40-plus-year career," and another blasting the administration's tariff policy as 'impossible for us to predict' with no 'clear goal'.
- Despite expectations that West Texas Intermediate oil will rise to $68 per barrel by the end of 2025, executives and analysts warn that policies aimed at driving down energy prices could make new drilling unaffordable, potentially leading to production declines and a need for former Venezuelan crude customers to seek new suppliers.
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Dallas Fed Survey Respondents Bearish on Short Term Oil Prices
The latest Dallas Fed Energy Survey has revealed that activity in the oil and gas sector increased slightly in the first quarter of 2025. The survey found that U.S. oil and gas production increased slightly in the first quarter, with the oil production index moving up from 1.1 in the fourth quarter to 5.6 in the first quarter. Meanwhile, the natural gas production index also improved from -3.5 to 4.8. U.S. oil rig count gained one to 487 accordi…
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