![]() Unfortunately, dampening those numbers are record highs in OFS companies' input costs and exploration and production (E&P) companies' costs for finding, developing resources, and operating their leases. Prices received for services, oilfield service (OFS) companies' operating margins, and industry labor indicators have all hit new high marks in the Dallas Fed survey's 6-year history. ![]() More than half of the respondents have attributed the restraint in growth to investor pressure to maintain capital discipline, indicating that some hard lessons were learned over the past few years.Īnother big reason why Big Oil is only looking to modestly ramp up production is inflation and the resultant rising costs.Īccording to the report, first-quarter oil and gas business activity is already showing record highs across several indicators. In fact, ConocoPhillips (NYSE:COP) CEO Ryan Lance says oil prices are so high that "we are encroaching upon the area of demand destruction. Nearly one-third of the respondents (29%) said growth would not be dependent on the price of oil. producers.Ī recent survey by the Dallas Fed has found that Big Oil intends to grow its median crude production by a mere 6% Y/Y while smaller firms aim to expand theirs by 15%.īut it's not all about the money this time around: 41% of respondents believe the WTI price between $80 and $99/bbl is enough to boost production growth an additional 20% believe $100 to $119 is sufficient, while a small portion said $120/bbl or higher. However, it appears that it will take a lot more to coax more output from long-suffering U.S. producers would be scrambling to make hay while the sun still shines by opening up the oil and gas taps.
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