Interesting report made public.
The overall theme in the 3rd Quarter Dallas Fed Energy Survey, which was released today, is that demand for petroleum products will outstrip supply and financial investors will return to the oil and gas sector.
This is consistent with Gulfslope’s opinion in their 10-Q for the quarterly period ended June 30th.
I value the opinions of the professionals in the oil and financial sectors, because their livelihoods depend on their ability to understand and correctly forecast trends that affect them.
”Special Questions” from the survey: (Data collected Sept. 14–22; 153 oil and gas firms responded to the special questions survey.)
1. Do you expect a significant tightening of the oil market by the end of 2024, given the current underinvestment in exploration? (85 percent) of executives said they expect a significant tightening of the oil market by the end of 2024.
2. Do you expect the age of inexpensive U.S. natural gas to come to an end as liquefied natural gas exports to Europe expand? Most executives (69 percent) expect the age of inexpensive U.S. natural gas to end by year-end 2025. An additional 12 percent of executives think it will happen by year-end 2030 and 3 percent expect it to occur after 2030. The remaining 16 percent don’t expect the age of inexpensive U.S. natural gas to end.
3. Do you expect financial investors to return to the oil and gas sector? The majority of the executives - (79 percent) - said they expect some financial investors to return to the oil and gas sector. 11 percent expect many will return, while 10 percent expect investors will not return.
4. In your opinion, will proposed carbon capture, utilization and storage projects be profitable with the increase in the 45Q tax credit in the 2022 Inflation Reduction Act? Slightly over half—54 percent—of executives expect most proposed carbon capture, utilization and storage projects won’t be profitable despite the increase in the 45Q tax credit in the 2022 Inflation Reduction Act. Forty-two percent expect some proposed projects to be profitable and 4 percent expect most projects to be profitable.
5. What net impact will the methane tax in the 2022 Inflation Reduction Act have on your firm? Most executives expect a negative net impact on their firm from the methane tax in the 2022 Inflation Reduction Act. 48 percent of executives said they think the net impact will be slightly negative, and an additional 14 percent anticipate it will be significantly negative. 31 percent expect a neutral impact. 7 percent anticipate a positive impact.
6. What do you expect WTI crude oil price to be at the end of 2022? Survey average: $88.74, Low Forecast: $65.00, High Forecast: $122.00, Price During Survey: $85.49.
The 3rd Quarter Dallas Fed Energy Survey link can be found in Gulfslope’s Intro.
Mrs. Smith
