2023-12-20 17:04:00
Oil and gas activity was essentially flat and optimism declined as uncertainty increased, according to a Federal Reserve Bank of Dallas survey of oil and gas company executives.
Part of that uncertainty is linked to the decline in average oil prices in the fourth quarter and questions about OPEC’s ability to influence oil prices, said Chiara Scotti, the bank’s research director.
“The outlook for companies in the oil and gas industry changed more dramatically, with the outlook index for these companies falling sharply from 46.8 to -9.0,” according to the survey.
According to the Bank’s latest survey, oil production increased in the top 48 U.S. states, but at a slower pace.
There are also expected to be more large mergers and acquisitions, and large companies have focused on debt reduction and mergers and acquisitions.
“Executives at large E&P companies are more likely to say that their goal for 2024, their main goal, is to acquire assets or reduce debt,” Mr. Scotti said at a press conference on Wednesday .
The main goal for small E&P companies in 2024 is to maintain production growth, Mr. Scotti said.
In 2024, we observe a moderation in the increase in input costs for service companies.
“Companies that have greater scale, companies that have greater production, are able to have greater bargaining power,” Mr. Scotti said.
Employment in the energy sector was unchanged due to fewer drilling rigs and improved industry efficiency, Mr. Scotti said.
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