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This Year’s Responses to the Dallas Fed Survey Standout from Years Past

Minneapolis, MN | July 11, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC

Bullish price sentiment paired with frustrations about fundamental conditions and uncertainties.

Three Things:

  1. Most respondents see end-of-year prices exceeding June’s average of ~$70. The distribution of responses leans so bullish that the Fed lumped everyone else into one <$70 bucket.

  2. That doesn’t necessarily mean that participants are excited about the second half of the year. Uncertainty and rising costs appear to be constraining operations.

  3. The comments provide anecdotal support for this interpretation, with many citing lack of access to capital and price volatility as concerns. Furthermore, this suggests a high need to hedge.

Oilmen are a Generally Bullish Lot, but…

The least surprising thing about the responses is that industry insiders are generally bullish. Starting with the March 2017 release, the Dallas Fed has asked for specific price expectations in the survey (they previously presented the question as a binary expectation, up or down). They ask, “What do you expect the WTI crude oil price to be at the end of the year?” In 17 of the 26 publications that included this question, respondents’ average expectation was above the average spot price of WTI during the review, with an average premium to spot of approximately $5.18/bbl. The expected crude oil price was approximately $3.53/bbl below the prevailing spot price average for the other nine surveys.

*This summary is based off July 2, 2023

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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