Houston — $79.64 per barrel.
That was the average response from 145 oil and gas firm executives when asked what they expected the WTI price to be at the end of 2023 as part of the first quarter 2023 Dallas Fed Energy Survey.
The low forecast in the survey came to $50 per barrel, while the high forecast came in at $160 per barrel. The WTI price during the survey collection period, which spanned March 15-23, averaged $68.51 per barrel.
In the fourth quarter 2022 Dallas Fed Energy Survey, which was the first Dallas Fed Energy Survey to ask respondents about year-end 2023 prices, the average response executives from 150 oil and gas firms delivered when asked what they expected the WTI price to be at the end of this year was $83.63 per barrel. The low forecast in that survey came in at $65 per barrel, while the high forecast came in at $160 per barrel.
The previous three surveys throughout 2022 all asked respondents what they expected year-end 2022 prices to be.
In its latest short term energy outlook (STEO), which was released on March 2, the U.S. Energy Information Administration (EIA) projected that the WTI spot price would average $77.10 per barrel in 2023 and $71.57 per barrel in 2024.
According to the March STEO, the EIA expects the WTI spot price to average $78.05 in the first quarter of 2023, $78 per barrel in the second quarter, $77 per barrel in the third quarter, $75.35 per barrel in the fourth quarter, $74 per barrel in the first quarter of next year, $72.34 per barrel in the second quarter of 2024, $70.69 per barrel in the third quarter of 2024, and $69.36 per barrel in the fourth quarter of 2024.
The next STEO is currently scheduled to be released on April 11.
In a report sent to Rigzone on April 4, analysts at Standard Chartered predicted that WTI would average $88 per barrel in 2023, $95 per barrel in 2024, and $106 per barrel in 2025.
The report showed that the analysts expected WTI to average $85 per barrel in the third quarter of 2023, $91 per barrel in the fourth quarter, $89 per barrel in the first quarter of next year, $91 per barrel in the second quarter of 2024, and $95 per barrel in the third quarter of 2024.
At the time of writing, the price of WTI stood at $80.85 per barrel. The commodity registered its lowest close of 2023, so far, on March 17, at $66.74 per barrel, before rising to a close of over $80 per barrel on April 3. WTI’s highest 2023 close, so far, was seen on January 26, at $87.47 per barrel.
Stalled Growth
Growth in the oil and gas sector stalled in the first quarter of 2023, according to oil and gas executives responding to the latest Dallas Fed Energy Survey.
The business activity index, which is described as the survey’s broadest measure of conditions facing Eleventh District energy firms, was 2.1 in the first quarter, the survey revealed. That was “down sharply” from 30.3 in fourth quarter of 2022, the Dallas Fed Energy Survey noted.
“The near-zero reading indicates activity was largely unchanged from the prior quarter, a break from the more than two-year stretch of rising activity,” the survey stated.
The survey also outlined that, according to executives at exploration and production firms, oil and natural gas production increased at a slower pace compared with the prior quarter. The oil production index was said to have remained positive but declined to 10.5 in the first quarter from 25.8 in the fourth. The natural gas production index was revealed to have fallen to 7.4 from 29.4.
The survey noted that firms reported rising costs for a ninth consecutive quarter and that the company outlook index turned negative in the first quarter, falling 27 points to -14.1. The overall outlook uncertainty index increased 23 points to 62.6, pointing to firms’ continued heightened uncertainty regarding their outlooks, the survey said, adding that 68 percent of firms reported greater uncertainty.
The Dallas Fed conducts the Dallas Fed Energy Survey quarterly to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District, the Dallas Fed notes on its website.
To contact the author, email andreas.exarheas@rigzone.com
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