Texas Energy Outlook Bullish for 2018

The Dallas Fed says the Texas oil and gas industry is going into 2018 on an optimistic note, but stresses that oil prices that stay at or above $60 a barrel are needed to spur exploration and investment in the state's shale fields, News Radio 1200 WOAI reports.

“The energy sector is going into 2018 on a positive note,” said Dallas Fed Senior Economist Michael D. Plante. “Growth in activity rebounded a bit relative to last quarter, outlooks improved greatly and there was a modest decline in uncertainty about the future. Responses were strong for both E&P and support services firms this time around, a notable change from recent surveys when many indexes for E&P firms were flagging.”

There is less uncertainty among Texas oil producers going into the new year, as prices have touched that $60 level this week, and predictions are for slight rises in the coming year.

“Oil prices appear to be high enough to support some additional drilling in 2018, but not high enough to significantly boost activity just yet,” Plante said. “A little more than half of respondents think the rig count will be higher six months from now but almost all respondents think West Texas Intermediate crude prices need to be more than $60 to see a substantial increase in the oil rig count.”

Oil and gas production in Texas is up this quarter for the fifth quarter in a row, following the huge slump following the price collapse of 2015.  Oil companies posted their seventh consecutive positive outlook reading.

Texas oil executives expect West Texas Intermediate to average just under $59 a barrel in 2018, and see a three to five year price outlook of between $60 and $69.

The Energy Information Administration has projected that the U.S. will set a record in crude oil production in 2018, with a greater share of that production going to export markets.


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