Oil and gas drillers in Texas are projecting a tougher 2020 despite a boom time now for energy prices, the Federal Reserve Bank of Dallas said in a quarterly survey report of the industry published on Friday
WASHINGTON (Pakistan Point News / Sputnik - 28th December, 2019) Oil and gas drillers in Texas are projecting a tougher 2020 despite a boom time now for energy prices, the Federal Reserve Bank of Dallas said in a quarterly survey report of the industry published on Friday.
"The capital markets for oil and gas remain extremely difficult. The risk appetites of the banks for energy lending are much lower," the Federal Reserve Bank of Dallas said in its fourth quarter energy survey report of 2019.
The report said those in the oil exploration business "have a guarded outlook on oil and natural gas prices for 2020 and are intending to curtail any new exploration during 2020".
Oil prices are having one of their biggest boom years in 2019, with the global crude benchmark Brent up 26 percent on the year, hovering at $68 per barrel, while the US benchmark, the West Texas Intermediate, trading about 36 percent higher at above $61 per barrel.
Even so, about 36 percent of oil and gas producers surveyed by the Dallas Federal reserve said they planned to cut drilling budgets in 2020. They said their budgets are based on oil prices at between $54 and $55 per barrel in 2020, suggesting expectations for the crude oil market to drop in the coming year.
"Small upstream oil and gas operators may find it increasingly difficult to schedule drilling and completion services as consolidation of service companies continues to occur," the report said.
Shale oil development via horizontal drilling is expected to continue slowing in 2020, and, absent commodity price increases, will probably be hit harder, the report added.
