US Oil and Gas Production Defies Crude Price Volatility
US oil and gas production has continued to rise despite extreme price volatility in crude oil markets. The latest survey by the Dallas Fed found that output increased among exploration and production firms in Q3, with both oil and gas production rising for two consecutive quarters. The region includes the Permian Basin, the country's largest oil-producing basin, as well as the Eagle Ford and Haynesville.
The Dallas Fed's respondents expect WTI to end 2026 at an average of $88 per barrel, but individual forecasts range from $70 to $126. They also expect Henry Hub natural gas to finish the year at an average of $3.29 per million British thermal units. However, one exploration and production executive told the Dallas Fed that it's 'tough to predict what the remainder of 2026 and also 2027 will potentially look like' due to the global conflict's effect on commodity markets.
US inventories are adding another complication, with commercial crude stocks increasing by 900,000 barrels last week to 427.3 million barrels, according to EIA data released Wednesday. Distillate inventories moved in the opposite direction, falling 2.3 million barrels and leaving stocks 14% below their five-year average for this time of year.