Oil Execs Raise Price Forecasts in Latest Dallas Fed Energy Survey
More than 100 oil and gas executives have shared their predictions for the future of West Texas Intermediate (WTI) crude oil prices in the latest Dallas Fed Energy Survey. The third-quarter survey revealed that executives from 106 firms anticipate an average price of $88 per barrel in six months, $82 per barrel in one year, $79 per barrel in two years, and $82 per barrel in five years.
These projections represent a significant shift from previous surveys. In the second quarter, the same group of executives forecasted $68 per barrel for both six months and one year, $72 per barrel for two years, and $77 per barrel for five years. The first-quarter survey showed even lower expectations, with an average of $78 per barrel for six months and $73 per barrel for both one and two years.
Looking ahead to the end of 2026, the third-quarter survey asked 125 executives to forecast WTI prices. The average response was $88.38 per barrel, with predictions ranging from $70 to $126 per barrel. The average daily spot price during the survey was $98.70 per barrel. In comparison, the second-quarter survey had an average forecast of $80.55 per barrel, ranging from $60 to $150 per barrel, while the first-quarter survey predicted $74.04 per barrel, ranging from $50 to $135 per barrel.
The survey also included special questions about fuel prices and cash flow allocation. Nearly half of the executives (48 percent) expect diesel prices to take more than four quarters to return to 2025 levels, compared to 36 percent for gasoline. Additionally, 50 percent of large exploration and production firms plan to allocate additional cash flow to capital return to shareholders, while 31 percent of small firms prioritize capital expenditures.
Comments from the survey highlighted various concerns, including rising material and labor costs, the impact of the Iranian conflict on price volatility, and the potential for a global recession to ease pressure on prices. One executive noted that refiners are benefiting more from increased crude oil and gasoline prices than producers, while another emphasized the importance of cash management in enhancing free cash flow yield.