As oil prices rebound, activity in the oil patch is expanding, respondents to the Dallas Fed Energy Survey.
The breakeven price for a well in the Permian, according to the survey, stood at $50, which was $1 higher than last year.
U.S. drillers are back to drilling, with West Texas Intermediate comfortably higher than breakeven prices, even in the costliest parts of the shale patch.
This tense détente will likely continue as OPEC cannot really afford to open its taps right now-not when oil prices are still lower than what Saudi Arabia needs to balance its budget.
In their price forecasts, industry insiders gave an average price projection for West Texas Intermediate of $61.13 per barrel.
The range of price forecasts was telling, too: projections varied from a low of $45 per barrel to a high of $85 per barrel, reflecting the return of price optimism in one of the industries that suffered the worst blow from the pandemic.
The optimism is in part fuelled by expectations that Biden administration policies will lead to tighter oil supply, which will automatically push prices higher.
https://oilprice.com/Energy/Energy-General/OPECs-Biggest-Fear-Is-Becoming-A-Reality.html
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