Executives say they need $60-plus crude to energize drilling

Oil executives say crude prices will have to vault over $60 a barrel to stimulate a big jump in domestic drilling next year, a survey by the Federal Reserve Bank of Dallas shows.

Forty-two percent of the surveyed executives in Texas, New Mexico and Louisiana said U.S. oil will have to float between $61 a barrel and $65 a barrel for the nation’s active oil rig count to grow significantly.

About 30 percent of the executives believe drillers will need $66 a barrel to $70 a barrel oil; 20 percent said oil would have to fetch more than $70 a barrel, according to the Federal Reserve Bank of Dallas.

“We still believe that $60 per barrel is the tipping point for substantial increases in domestic drilling,” one executive said.

U.S. oil prices settled at $60.42 a barrel Friday. The U.S. oil rig count held steady at 747, unchanged from previous week, the oil field services company Baker Hughes reported Friday.

Drilllers, however, pulled two natural gas rigs from the U.S. shale plays. The overall rig count stands at 929, up by more than 270, or 40 percent, from a year ago.

About half (51 percent) of the executives expect the oil rig count to rise over the next six months, while 46 percent said they thought it would stay close to current levels.

And half of the surveyed executives said they plan to spend slightly more capital in the oil patch next year compared with this year, while 19 percent expect to increase spending significantly. Almost a quarter said they expect to keep spending flat next year.