U.S. crude output reached a record 13.955 million barrels per day in the week ending September 25, driven by production gains across Texas, Louisiana and New Mexico. Yet a Dallas Federal Reserve survey of 125 energy firms reveals deep uncertainty about whether elevated prices can persist.
U.S. crude futures averaged $86 a barrel in the third quarter, swinging from $67 in early July to $107 in mid-September. Exploration and production companies responding to the Dallas Fed survey—83 of the 125 respondents—flagged the volatility as a material constraint on capital allocation and hedging decisions.
Refiners benefited from historically wide cracking margins as fuel supplies tightened. Refinery utilization jumped to 96.3 percent in Q3, up from 94.7 percent a year earlier and 91.9 percent in 2024. That operational intensity left little room for unplanned downtime.
The seven-month Iran war has created the price support by disrupting global supplies and closing key shipping routes. Global importers are competing for a smaller barrel pool. One E&P survey respondent said: "We are getting to the point in this global conflict and its effect on commodity markets that it is tough to predict what the remainder of 2026 and also 2027 will look like." Another noted: "It sure would be nice to have a less volatile market."
Producers expect WTI crude to trade at $88 per barrel at year-end 2026, but the wide $70-to-$126 range in forecasts signals genuine disagreement about oil's path. For natural gas, respondents penciled in a Henry Hub price of $3.29 per million British thermal units by year-end, indicating material dispersion across commodity price expectations.
