Released September 10, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land,
Texas)--Most energy firms reported that the price of oil may be getting too low to boost production and tariffs are impacting the cost of drilling new wells, the Federal Reserve Bank of Dallas found.
West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, was trading at about $63 per barrel in early Tuesday trading. WTI averaged $76.60 per barrel last year. The U.S. Energy Information Administration (EIA), the statistical arm of the Department of Energy, in a monthly report for September estimated WTI would average $64.16 per barrel this year and fall to $47.77 by next year.
The Dallas Fed reported Monday that most major energy firms it surveyed said WTI at $60 was too low to support increased production. While the upstream industry is doing more with less by drilling longer laterals and using multi-bore wells, recent rig counts suggest the U.S. oil sector is already on its back foot.
Over the seven-day period ending September 5, oilfield services firm Baker Hughes Company (Houston, Texas) listed 537 rigs in the U.S., about 8% lower than during the same period last year. Despite improved efficiencies, that could start showing up in production trends.
"According to a consensus average of several projections, U.S. crude oil production is expected to plateau," the Dallas Fed reported.
Total U.S. crude oil production is expected to average 13.4 million barrels per day (BBL/d), an increase of 100,000 BBL/d from the same period last year. By next year, federal estimates point to an annual 2025 average of 13 million BBL/d, about 200,000 BBL/d lower than EIA estimates from August.
The Dallas Fed's report on sentiment followed a weekend decision from OPEC+, the core members of the Organization of the Petroleum Exporting Countries plus non-member state allies such as Russia, to start unwinding production curtailments by October.
The market, however, is oversupplied. The Dallas Fed found that OPEC+ members overshot their August production targets by about 600,000 BBL/d, and it would take about four months to erase that overhang based on the weekend allotment agreement.
Subscribers to Industrial Info's Database can click here for a report on the latest decision from OPEC+.
Meanwhile, ostensibly as part of an effort to grab market share, Saudi Arabia late on Monday lowered its official selling price (OSP) for oil sold to Asian and Northwest European customers, dealing another possible blow to a U.S. oil sector hobbled by prices. ConocoPhillips (Houston, Texas) and Chevron Corporation (Houston) are among the handful of major energy companies already shedding jobs, with Conoco cutting 25% of its workforce amid industry pressure from lower oil prices, an oversupplied market and U.S. economic uncertainty.
Much of that uncertainty stems from U.S. President Donald Trump's trade policies. Trump opted not to impose tariffs on Canadian energy, but he did follow through with stiff import taxes for aluminum and steel. That creates headwinds for the U.S. as it doesn't produce much of the steel necessary for oil and gas pipelines.
The Dallas Fed noted that the energy companies it surveyed have reported cost increases due to aluminum and steel tariffs, but the impact has been relatively low because of the surge in buying ahead before they were implemented.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, was trading at about $63 per barrel in early Tuesday trading. WTI averaged $76.60 per barrel last year. The U.S. Energy Information Administration (EIA), the statistical arm of the Department of Energy, in a monthly report for September estimated WTI would average $64.16 per barrel this year and fall to $47.77 by next year.
The Dallas Fed reported Monday that most major energy firms it surveyed said WTI at $60 was too low to support increased production. While the upstream industry is doing more with less by drilling longer laterals and using multi-bore wells, recent rig counts suggest the U.S. oil sector is already on its back foot.
Over the seven-day period ending September 5, oilfield services firm Baker Hughes Company (Houston, Texas) listed 537 rigs in the U.S., about 8% lower than during the same period last year. Despite improved efficiencies, that could start showing up in production trends.
"According to a consensus average of several projections, U.S. crude oil production is expected to plateau," the Dallas Fed reported.
Total U.S. crude oil production is expected to average 13.4 million barrels per day (BBL/d), an increase of 100,000 BBL/d from the same period last year. By next year, federal estimates point to an annual 2025 average of 13 million BBL/d, about 200,000 BBL/d lower than EIA estimates from August.
The Dallas Fed's report on sentiment followed a weekend decision from OPEC+, the core members of the Organization of the Petroleum Exporting Countries plus non-member state allies such as Russia, to start unwinding production curtailments by October.
The market, however, is oversupplied. The Dallas Fed found that OPEC+ members overshot their August production targets by about 600,000 BBL/d, and it would take about four months to erase that overhang based on the weekend allotment agreement.
Subscribers to Industrial Info's Database can click here for a report on the latest decision from OPEC+.
Meanwhile, ostensibly as part of an effort to grab market share, Saudi Arabia late on Monday lowered its official selling price (OSP) for oil sold to Asian and Northwest European customers, dealing another possible blow to a U.S. oil sector hobbled by prices. ConocoPhillips (Houston, Texas) and Chevron Corporation (Houston) are among the handful of major energy companies already shedding jobs, with Conoco cutting 25% of its workforce amid industry pressure from lower oil prices, an oversupplied market and U.S. economic uncertainty.
Much of that uncertainty stems from U.S. President Donald Trump's trade policies. Trump opted not to impose tariffs on Canadian energy, but he did follow through with stiff import taxes for aluminum and steel. That creates headwinds for the U.S. as it doesn't produce much of the steel necessary for oil and gas pipelines.
The Dallas Fed noted that the energy companies it surveyed have reported cost increases due to aluminum and steel tariffs, but the impact has been relatively low because of the surge in buying ahead before they were implemented.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
