Oil executives have mixed expectations for 2021
2021 can't be worse for oil companies than 2020, but wow is that a low bar, and a new survey shows that executives see a mixed picture ahead.
Driving the news: U.S. prices hit their highest levels since February early today before receding.
- But, zooming out to global production, Reuters reports most "OPEC+ countries would like to postpone a planned increase in oil output from February due to weakening fuel demand amid new global lockdowns to stop the spread of the coronavirus, three OPEC+ sources said on Monday."
The big picture: A Dallas Fed survey of companies in the heart of the U.S. oil patch finds that activity "jumped" in the year's final quarter. The poll of companies in the district, which includes the prolific Permian Basin in Texas and New Mexico, also finds...
- Employment continued to decline in Q4, though layoffs "abated somewhat."
- Half the nearly 150 companies (a mix of producers and oilfield service contractors) plan to keep their belts tight after 2020's cutbacks.
Why it matters: The surveys provide a window onto how many companies see the near- to medium-term future after COVID-19 caused a historic collapse in demand and prices.
What's next: 2020 saw a wave of consolidation and bankruptcies, and not everyone thinks they'll be left standing at the end of 2022. The survey asked executives how many of the country's 60 publicly listed independent producers they think will remain by then...
- 47% think that between 37 and 48 will be left standing.
- 24% think it'll be between 25 and 26, while another quarter think more than 49 will survive.