Dallas Survey The Oil & Gas Outlook Is Finally Improving

After a grim year, the latest Dallas Fed Energy Survey has revealed that the oil and gas outlook is finally brightening. According to the business activity index, the survey’s activity in Dallas’ energy sector increased from -5.9 in the third quarter to 6.0 in the fourth quarter. The company outlook index increased 19 points from -12.1 to 7.1, suggesting mild optimism among oil and gas companies while the outlook uncertainty index declined 26 points to 22.4.

However, the oil production index declined from 7.9 in the third quarter to 1.1 in the fourth quarter, suggesting oil production was relatively unchanged during the period while the natural gas production index improved from -13.3 to -3.5, indicating gas production edged lower.

Overall crude oil production in the U.S. Lower 48 (L48) states hit a record 11.3 million barrels per day (b/d) in November 2024, good for a 3% year over year increase. The production growth came despite fewer active rigs in most major producing regions thanks to improved operational efficiency.

Meanwhile, U.S. natural gas production from shale and tight formations decreased slightly in the first nine months of 2024, marking the first annual decrease in U.S. shale gas production since 2000. U.S. shale gas production declined ~1% to 81.2 billion cubic feet per day (Bcf/d), compared with the same period in 2023; however, other U.S. dry natural gas production increased 6% to 22.1 Bcf/d. 

Low natural gas prices in the early part of the year prompted producers to cut back on production, with large declines recorded in the Haynesville and Utica plays. From January through September 2024, shale gas production decreased by 12% (1.8 Bcf/d) in the Haynesville and by 10% (0.6 Bcf/d) in the Utica compared with the same period in 2023. At the same time, shale gas production in the Permian play grew by 10% (1.6 Bcf/d). Production in the Marcellus play, which leads U.S. shale gas production, remained flat.

By Alex Kimani for Oilprice.com

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