A majority of energy executives from Texas, Louisiana, and New Mexico believe U.S. oil production has reached its high point, according to a survey. The Federal Reserve of Dallas questioned 154 executives on their outlook for the energy sector. Two-thirds responded that they believe oil output has peaked.
Oil output hit a high of 12.2 million barrels per day prior to the decline in demand over recent months. This was triggered above all by the coronavirus pandemic and related stay at home orders. These factors dramatically cut energy demand in the transportation and business sectors. The downturn was worsened by the dispute between Russia and Saudi Arabia over oil production levels.
The executives expect oil prices to rise gradually to around $43 per barrel by the end of 2020. But these levels are too low to prompt a substantial revival and allow the sector to return to its earlier target of more than 13 million barrels a day. According to the International Energy Agency, 100 new rigs would have to be added in the US just to keep oil production steady in 2021.