(Reuters) – The average price of U.S. benchmark West Texas Intermediate (WTI) crude futures should be $68.81 a barrel by the end of the year according to results of a survey released by the Federal Reserve Bank of Dallas on Monday.
Responses ranged between $55 and $85 per barrel, according to the results of a poll of oil and gas executives, with WTI spot prices averaging $69.79 during the survey period, which was conducted from Sept. 12-20.
On Monday, WTI was trading around $74.75 per barrel.
A majority (64 percent) of oil and gas executives said they expect the global oil market to be close to balanced in 2019, while about a quarter of respondents see the market as undersupplied and a small 10 percent of those polled forecast an oversupplied market.
The survey also showed utilization of equipment by oilfield services firms slightly increased in the third quarter, with the corresponding index at 44.8, up three points from the second quarter.
Input costs on the oilfield services side continued to rise, with the index jumping from 36.3 to 46.6 in the third quarter.
More than half the survey’s respondents said they expect that crude oil pipeline capacity will be sufficient to alleviate the current takeaway constraints in the Permian Basin, the biggest U.S. oil field, by the end of 2019.
Production in the Permian in western Texas and eastern New Mexico has nearly doubled in the last three years, to 3.4 million barrels per day (bpd), close to output in OPEC’s No. 3 producer Iran. But booming output has overwhelmed existing pipelines to Gulf Coast export markets.
Over slightly half of those surveyed said the steel import tariffs have had a slightly negative impact on their business so far, with 33 percent saying they had no impact.
“The steel tariffs have added approximately $100,000 of costs to each of our wells. Some thought should be given to removing the tariffs when domestic mills are not currently running the products,” said a survey respondent.
The survey’s respondents included 110 companies focused on exploration and production activities and 61 that operate in the oilfield service sector.