A December Federal Reserve survey in Dallas surveyed executives at 134 energy companies in Texas, southern New Mexico and northern Louisiana. This includes 90 exploration and production companies and 44 oil and gas service companies.
According to the survey, US oil and gas executives are predicting that mining output and drilling operations will increase next year as oil prices escalate. However, they face sharply increased costs.
Specifically, about 49% of surveyed executives said they aim to expand output next year. 15% said their main focus would be to maintain existing production. 13% plan to focus on debt reduction. The 6-month outlook remains positive, but the index has fallen to 53.2 from 58.9 in the previous quarter.
The oil company's executives who were publicly traded said they mainly plan to keep production unchanged or expand at a low percentage next year and focus on improving shareholder profits.
US oil prices rose 1.2% on Wednesday to around $76.88/barrel CLc1. Since the beginning of the year, oil prices have increased by nearly 60% in the context of demand for oil and engine fuel recovering after the recession caused by COVID-19.
The Input Cost Index among service companies hit a record high in the survey, increasing to 69.8 from 60.8 in the previous quarter.
Mining service providers reported higher costs in the fourth quarter. Accordingly, operating expenses for renting increased to 42 from 29.4 in the quarter, the highest level since the Fed began the survey 5 years ago.
"Increased supply chain disruptions and related inflation are likely to delay and impact drilling and completion by 2022," an executive director commented. Others said they are having difficulty finding highly qualified workers.
In the special question-and-answer session, 95% of people said they did not expect countries to meet their commitments to reduce greenhouse gas emissions by 2030.
Many executives said that uncertainty about the energy policies of the Joe Biden administration has made planning difficult.
