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Even as oil prices ascended to new highs of more than $124 a barrel this week, many oil and gas industry executives say they expect the price to fall significantly by year's end, a new survey shows.
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Nine percent said they expect the price to close the year where it's been this week -- above $120 a barrel.
What's more, 44 percent of the executives said their companies plan to increase capital spending on exploration and production by 10 percent during the next year.
The survey was conducted last month and scheduled for release Friday. Participants included executives for major oil companies, independent exploration and production outfits and other energy companies.
"The expectation of increased investment by U.S. energy companies shows oil and gas executives are deeply concerned about energy security," said Bill Kimble, who oversees the global energy institute at KPMG, the audit, tax and advisory firm.
Of late, all eyes have been on crude prices, which have nearly doubled in the past year. The dollar's decline against the euro and other foreign currencies has helped spur the rise, attracting investors looking for a hedge against inflation.
Rising demand for oil from the rapidly developing economies of China and India has played a role too, as have concerns about tighter supplies. Indeed, 63 percent of survey participants said growing demand in emerging markets was the main factor in the historic rise in oil prices.
Widely watched oil price prognosticator Goldman Sachs said this week oil prices could rise to $150 to $200 within two years; others say crude could plummet to as low as $40 or $50 a barrel during the same period.
"To be sure, the future does not unfold neatly in line with any projection, and the time frame of the actual price surge has been remarkably short," Cambridge Energy Research Associates said in a report this week.
Asked what would most enhance U.S. energy security, participants overwhelmingly said opening up more acreage for domestic drilling was the best option. In particular, 43 percent said the Arctic National Wildlife Refuge should be opened for drilling. Another 28 percent said more investment in renewable energy sources such as biodiesel would enhance U.S. energy security the most.
However, even though many of the executives support further investment in renewable energy sources, the majority still don't view renewables as a serious near-term solution to the energy supply equation.
In last year's survey, 60 percent of 553 petroleum industry executives said large-scale production of renewable fuels was not a near-term possibility, at least not in the next couple of years.
In the most-recent survey, 54 percent gave the same response, though 2015 was the target date.
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