HOUSTON: Oil and gas production in Texas, Louisiana and New Mexico decreased in the first quarter of 2024, the Federal Reserve Bank of Dallas said on Wednesday in its quarterly survey of energy activity. The survey of executives at 147 energy firms suggested a small decline in production.

A natural gas production index also turned negative and oilfield services firms reported a modest deterioration in business activity, the Dallas Fed reported. The fall in production however did not lead to a major change in activity.

A broad measure of business activity was essentially unchanged from the fourth quarter last year, the Dallas Fed reported. Oil prices have trended higher this year with the US benchmark oil prices trading at $81.36 per barrel in early trading on Wednesday. On average, respondents expected a West Texas Intermediate (WTI) oil price of $80 per barrel at year-end 2024, the survey of company executives showed.

When asked about longer-term expectations, respondents on average expected a WTI oil price of $83 per barrel two years from now and $90 per barrel five years from now, the survey showed. Companies need $64 per barrel on average to profitably drill a new well, up $2 a barrel from the average estimate a year ago, the survey said. Natural gas prices have been among the lowest for years and some companies are planning to reduce the number of gas wells they will be drilling.

Survey participants expected a Henry Hub natural gas price of $2.59 per million British thermal units (mmBtu) at year-end and $3.18 per mmBtu in two years.