The US oil boom shows no signs of stopping as shale execs say they'll ramp up spending in 2025
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- According to a Dallas Fed survey, US oil company chiefs plan to increase spending in 2025.
- 58% of shale execs said they would increase spending, and 34% said they would increase investment.
- Firms are feeling optimistic that Trump will boost the industry, even as oil prices have sagged.
The US oil industry boom looks set to continue, as a majority of shale executives say they plan to increase their spending in the next year, according to a new survey from the Dallas Federal Reserve.
The Dallas Fed Energy Survey — a quarterly survey of oil and gas firms across Texas, southern New Mexico, and northern Louisiana — found that around 58% of executives in the industry said they expected capital spending to increase over the coming year, while 14% said they expected a "significant increase."
More than a third of surveyed executives also said they planned on increasing the amount they invest in 2025, compared to their plans three months ago.
Drilling and completion were the top reasons companies wanted to ramp up investing, with 68% of execs saying they would increase investment in that area.
About 29% said they would increase investment in land acreage, which includes business deals like mergers and acquisitions.
The US oil boom has been a highlight of the energy markets over the last few years, with American shale producers pumping vast amounts of crude. According to the Energy Information Agency, the US produced more oil than any other country in history for the sixth year in a row in 2023.
Executives in the survey also reported feeling more optimistic ahead of Donald Trump's second term in office. The Dallas Fed survey's company outlook index spiked from -12.1 to 7.1 over the fourth quarter, which suggests that industry sentiment turned positive.
"We're assuming that the new administration will encourage more development of oil and gas projects," one executive said in the survey.
The new administration should also "have a positive effect on the economy," which would benefit oil firms, another executive said.
The plans to spend more on their businesses come despite weakness in oil prices over the last several years. Brent crude, the international benchmark is down 34% from its peak in the summer of 2022. West Texas Intermediate crude, meanwhile, traded around $73 a barrel on Thursday, 40% lower than its peak in 2022.
While the OPEC+ cartel of oil-producing countries has restricted output since the start of last year, non-OPEC nations like the US, Brazil, Guyana, and Canada have kept production high. As a result, supply has remained high at a time when demand from key economies like China has slumped.
The International Energy Agency expects OPEC's grip on oil markets to continue to weaken in 2025.