Executives from oil and gas firms have revealed where they expect the West Texas Intermediate (WTI) crude oil price to be at various points in the future in the first quarter Dallas Fed Energy Survey, which was released this week.
The survey asked participants what they expect WTI prices to be in six months, one year, two years, and five years. Executives from 116 oil and gas firms answered this question and gave a mean response of $78 per barrel for the six month mark, $73 per barrel for the year and two year marks, and $79 per barrel for the five year mark, the survey showed.
Executives from 116 oil and gas firms answered this question in the fourth quarter 2025 Dallas Fed Energy Survey and gave a mean response of $59 per barrel for the six month mark, $63 per barrel for the year mark, $69 per barrel for the two year mark, and $75 per barrel for the five year mark, that survey showed.
The first quarter 2026 survey also asked participants what they expect the WTI crude oil price to be at the end of 2026. Executives from 131 oil and gas firms answered this question and gave an average response of $74.04 per barrel, the survey highlighted. The low forecast was $50 per barrel, the high forecast was $135.00 per barrel, and the average daily spot price during the survey was $94.65 per barrel, the survey pointed out.
The fourth quarter Dallas Fed Energy Survey was the first Dallas Fed Energy Survey which asked participants what they expect the WTI crude oil price to be at the end of 2026. In that survey, executives from 128 oil and gas firms answered the question and gave an average response of $62.41 per barrel, that survey highlighted. The low forecast was $50 per barrel, the high forecast was $82.30 per barrel, and the average daily spot price during the survey was $59.00 per barrel, the fourth quarter survey pointed out.
Operating Expense, Profitability, Well Numbers
The latest Dallas Fed Energy Survey also asked exploration and production firms, in the top two areas in which their firm is active, what WTI oil price do they need to cover operating expenses for existing wells. Executives from 80 exploration and production companies answered the question, and the average price across the entire sample was approximately $43 per barrel, the survey outlined. This was up from $41 last year, the survey pointed out.
“Across regions, the average price necessary to cover operating expenses ranges from $34 to $47 per barrel. All respondents can cover operating expenses for existing wells at current prices,” the survey stated.
“Large firms (with crude oil production of 10,000 barrels per day or more as of fourth quarter 2025) require prices of $32 per barrel to cover operating expenses for existing wells, based on the average of company responses. That compares with $46 for small firms (fewer than 10,000 barrels per day),” it added.
The latest survey went on to ask exploration and production companies, in the top two areas in which their firm is active, what WTI oil price do they need to profitably drill a new well. Executives from 80 exploration and production companies also answered this question, according to the survey, which stated that, for the entire sample, firms require $66 per barrel on average to profitably drill. That’s higher than the $65 per barrel price when this question was asked in last year’s first-quarter survey, the latest Dallas Fed Energy Survey noted.
“Across regions, average break-even prices to profitably drill range from $62 to $70 per barrel,” the survey stated.
“Break-even prices in the Permian Basin average $67 per barrel, up from $65 last year,” it added.
“Large firms (with crude oil production of 10,000 barrels per day or more as of fourth quarter 2025) require a $59 per barrel price to profitably drill, based on the average of company responses,” it continued.
“That compares with $68 for small firms (fewer than 10,000 barrels per day),” it went on to state.
The Dallas Fed’s first quarter 2026 survey also asked exploration and production executives, who each said their firms drilled or completed horizontal wells in the past two years, in light of the recent increase in oil prices, how has the number of wells their firm expects to drill in 2026 changed since the start of the year.
Executives from 34 exploration and production firms answered this question, the survey highlighted. Half of the executives surveyed said the number of wells their firms expect to drill in 2026 has not changed since the start of the year, the survey said.
“Twenty-six percent said they expect the number of wells they drill to ‘increase slightly’, and 21 percent said it would ‘increase significantly’. Conversely, three percent said drilling expectations ‘decreased significantly’,” the survey added.
“Executives at small E&P firms were more likely than their counterparts at large firms to indicate they increased the number of wells they plan to drill since the beginning of the year,” it continued.
“In the U.S., small E&P firms are greater in number, but large E&P firms represent the majority of production (more than 80 percent),” it went on to state.
Oil, Gas Sector Activity
The first quarter Dallas Fed survey highlighted that activity in the oil and gas sector increased in the first quarter of 2026, according to oil and gas executives responding to the latest survey.
“The business activity index, the survey’s broadest measure of the conditions energy firms face in the Eleventh District, turned positive (indicating expansion), increasing from -6.2 in the fourth quarter of 2025 to 21.0 in the first quarter of 2026,” the survey noted.
“The company outlook index also turned positive, advancing from -15.2 in the fourth quarter to 32.2 in the first quarter, suggesting improving outlooks among firms. Meanwhile, the outlook uncertainty index remained elevated and increased from 43.4 to 53.7,” it added.
Oil and gas production was little changed in the first quarter, according to executives at exploration and production firms, the survey highlighted.
“The oil production index increased slightly from -3.4 to 0. Similarly, the natural gas production index edged higher from 0 to 2.3,” it added.
Costs increased at a slightly faster pace when compared with the prior quarter, the survey noted.
“The input cost index for oilfield services firms increased from 24.4 to 34.9. Among exploration and production firms, the finding and development costs index jumped from 5.7 to 22.3. Meanwhile, the lease operating expenses index was relatively unchanged at 30.0,” it said.
Oilfield services firms reported modest improvement in nearly all indicators, the survey stated, noting that this was a shift from the prior quarter.
“The equipment utilization index for oilfield services firms turned positive, jumping from -12.2 to 30.2,” it said.
“The operating margin index remained negative but increased from -31.7 to -7.0, indicating margins compressed at a slower rate. Meanwhile, the prices received for services index rose sharply from -30.0 to 9.3,” it added.
The first quarter survey went on to state that, overall, demand for employees was unchanged. It added, however, that those on the job tended to work more hours than in the previous quarter.
“The aggregate employment index increased from -10.8 in the fourth quarter to 0.8 in the first,” the survey said.
“Additionally, the aggregate employee hours index jumped from -9.3 to 12.8. Meanwhile, the aggregate wages and benefits index increased from 6.2 to 23.5,” it noted.
The Dallas Fed conducts the Dallas Fed Energy Survey quarterly to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District, the survey states, pointing out that the Eleventh District encompasses Texas, northern Louisiana and southern New Mexico.
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