Jan 3, 2022 - Energy & Environment

U.S. oil producers plan to boost output despite rising costs

Data: Federal Reserve Bank of Dallas; Chart: Axios Visuals

Companies in the heart of the U.S. oil patch plan to keep boosting production this year despite rising costs.

Driving the news: The Dallas Fed's fourth-quarter 2021 survey of oil-and-gas execs finds that "costs rose sharply for a third straight quarter." However, most expect to keep boosting output as prices and demand have recovered from the pandemic.

Why it matters: The Dallas Fed's quarterly survey takes the pulse of companies in the region that includes the Permian Basin in Texas and New Mexico.

What they're saying: Anonymous comments take stock of the changing landscape.

  • "The political pressure forcing available capital away from the energy industry is a problem for everyone. Banks view lending to the energy industry as having a 'political risk,'" one respondent said.

The big picture: The U.S. Energy Information Administration estimates domestic crude production will average 11.8 million barrels per day (bpd) this year, exceeding 12 million bpd late in the year.

  • That remains below the pre-pandemic peak of around 13 million bpd.

Go deeper: A new warning on oil investment

Go deeper