Oil companies operating in the central US want oil to average $69 a barrel before they’ll substantially expand drilling, according to the Federal Reserve Bank of Kansas City.
That’s up from $56 a year earlier, according to a survey of firms released by the Kansas City Fed, which serves all or parts of seven states from Nebraska to New Mexico.
West Texas Intermediate, the US benchmark, has averaged about $66 this year and has risen 17 percent since the end of 2017 amid robust demand and supply disruptions in Canada, Libya, Venezuela and elsewhere. Oil settled at $71.01 in New York.
According to the survey, expectations about future drilling and business activity by energy companies rose in the second quarter even as capital expenditures declined. About 65 percent of companies said they anticipate a “medium business risk” from higher OPEC production levels.