Spending restraint remains the guiding force for the US upstream sector, according to Jesse Thompson, senior business economist at the Federal Bank of Dallas.
"The industry is playing it very cautiously," Thompson said today at the Argus Global Crude Summit Americas in Houston, Texas. "Capital discipline is still very much the order of the day."
What has surprised many is that output keeps going up, despite the fact that the rig count continues to retreat. That can be attributed to productivity gains, such as the practice of speeding up drilling times, and targeting of longer lateral wells, with fewer people employed in the industry, he said.
US crude production growth is seen ending this year up 200,000 b/d, compared with 300,000 b/d in 2024, Thompson said.
Despite the perception by some that all the low-hanging fruit has already been picked and productivity gains will ease up, they continue to defy expectations.
"And then every year they beat their own production numbers," Thompson said.
Turning to the domestic economy, consumption growth is running above trend based on the latest data, Thompson said. And the consensus among forecasters is that GDP growth is seen around 2pc this year.
