Where Will WTI Crude Oil Price be at End-2024?

$77.68 per barrel.

That was the average response executives from 143 oil and gas firms gave when asked what they expect the WTI crude oil price to be at the end of 2024, as part of the fourth quarter Dallas Fed Energy Survey.

The low forecast was $51 per barrel, the high forecast was $110 per barrel, and the WTI price during the survey was $69.77 per barrel, the survey highlighted. This was the first time the Dallas Fed Energy Survey asked about end-2024 prices. Its previous third quarter survey asked participants what they expected the WTI crude price to be at the end of 2023.

The average response to the WTI crude price question in the third quarter survey was $87.91 per barrel. Executives from 146 oil and gas firms answered that question.

In its latest short term energy outlook, which was released in December, the U.S. Energy Information Administration (EIA) projected that the WTI spot price would average $76.50 per barrel in the fourth quarter of 2024 and $78.07 per barrel overall this year.

That STEO forecast that the WTI spot price would come in at $78.82 per barrel in the fourth quarter of 2023 and $77.63 per barrel overall in 2023.

In a report published on December 7, which was sent to Rigzone, Macquarie strategists projected that the WTI price would average $80 per barrel in the fourth quarter of 2023, $77.62 per barrel overall in 2023, $69.50 per barrel in the fourth quarter of 2024, and $72.88 per barrel overall in 2024.

A report sent to Rigzone on December 15 showed that BMI, a Fitch Solutions company, saw WTI crude averaging $82 per barrel in 2024. Another report sent to Rigzone on December 5 showed that Standard Chartered saw the NYMEX WTI basis Cushing price averaging $103 per barrel in the fourth quarter of 2024 and $95 per barrel overall this year.

The latest Dallas Fed Energy Survey also asked executives what WTI crude oil price their firm is using for capital planning in 2024. Executives from 140 oil and gas firms answered this question.

“The average response was $71 per barrel, with the median and the mode at $70 per barrel,” the Dallas Fed noted in the survey.

“The average price used is relatively close to the price used in the budget in 2023 at $73, but higher than prior years (2019, $54; 2020, $54; 2021, $44; 2022, $64),” the Dallas Fed added.

Oil, Gas Sector Activity

Activity in the oil and gas sector was essentially unchanged in 4Q 2023, according to oil and gas executives responding to the Dallas Fed Energy Survey, the Dallas Fed stated in the latest survey.

“The business activity index, the survey’s broadest measure of conditions energy firms in the Eleventh District face, remained positive but slipped from 10.9 in the third quarter to 3.6 in the fourth quarter,” the Dallas Fed added.

“The business activity index was 7.5 for exploration and production (E&P) firms versus -4.2 for services firms, suggesting activity slightly grew for E&P firms, but declined slightly for service firms,” it continued.

The Dallas Fed noted in the survey that oil production “increased but at a significantly slower pace compared with the prior quarter, according to executives at E&P firms”.

“The oil production index remained positive but fell from 26.5 in the third quarter to 5.3 in the fourth. Meanwhile, the natural gas production index edged up from 15.4 to 17.9,” it added.

Among oilfield services firms the input cost index remained positive but slipped from 33.4 to 21.3, the Dallas Fed said in the survey, adding that, among E&P firms, the finding and development costs index rose from 18.3 to 24.4.

“Meanwhile, the lease operating expenses index moved down from 25.6 to 22.6,” the organization said.

Oilfield services firms reported modest deterioration in nearly all indicators, the Dallas Fed highlighted in the survey.

“The equipment utilization index moved down from -4.2 in the third quarter to -8.4 in the fourth quarter,” it added.

“The operating margin index was relatively unchanged at -32.0. The index of prices received for services turned negative and fell from 2.1 to -6.2,” it continued.

The aggregate employment index was relatively unchanged at 4.2 in the fourth quarter, the Dallas Fed stated in the survey.

“The aggregate employee hours index remained positive but fell from 9.6 in the third quarter to 2.8 in the fourth quarter. Meanwhile, the aggregate wages and benefits index edged down from 24.5 to 21.2,” it said.

The Dallas Fed also highlighted in the survey that the company outlook index turned negative in the fourth quarter “and plunged 48 points to -12.4, suggesting some pessimism among firms”.

“The company outlook for E&P firms changed more drastically, as the company outlook index for these firms fell sharply from 46.8 to -9.0,” it added.

“The overall outlook uncertainty index jumped 39 points to 46.1, suggesting mounting uncertainty,” it went on to state.

To contact the author, email andreas.exarheas@rigzone.com