3Q Energy Activity Accelerates and Growth Strong, Survey Finds | Gulf Coast Oil Rig Equipment & Repair
Activity in the Tenth District’s energy sector accelerated in third quarter, an indicator of growth, according to results from the Federal Reserve Bank of Kansas City’s quarterly energy survey released Oct.
12.
The Kansas City Fed serves the Tenth Federal Reserve District, which includes western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico.
The drilling and business activity index jumped to 45 in the third quarter – the highest level since first quarter of 2017. Last quarter, the index was at 26.
Additionally, the year-over-year drilling and business activity index climbed from 41 to 57, the highest it’s been in more than a year.
Oil Prices Poised for Profit
Energy firms also weighed in on what they felt oil prices should be in order for drilling to be profitable in their most active fields.
According to respondents, the average oil price needs to be $55 per barrel and the average natural gas price needs to be $3.23 per million Btu in order for drilling to be profitable. These averages increased from the last two times this topic was included in the quarterly energy survey.
Respondents were also able to forecast where they thought oil prices would be in the future – six months, one year, two years and five years. The results for future average WTI prices per barrel are as follows:
- $71 – 6 months
- $72 – 1 year
- $73 – 2 years
- $79 – 5 years
The average for Henry Hub natural gas prices per million Btu are as follows:
- $2.89 – 6 months
- $2.92 – 1 year
- $3.10 – 2 years
- $3.42 – 5 years