Dallas Fed Survey: ULSD/WTI Spread High until 2027


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- Nearly half of oil and gas executives surveyed in 
September by the Federal Reserve Bank of Dallas expected diesel prices to 
remain elevated relative to crude oil for more than a year, according to 
third-quarter results released Wednesday (9/30).

   The Dallas Fed survey found that 48% of respondents expected the 
diesel-crude oil price spread to return to 2025 levels within four quarters, 
while 36% expected the gasoline spread to take longer than four quarters.

   The results come as refined-product prices have remained elevated relative 
to crude oil in 2026. Respondents were surveyed September 16-24, when West 
Texas Intermediate crude averaged $98.70 bbl. The Dallas Fed surveyed 125 oil 
and gas firms, including 83 exploration and production companies and 42 
oilfield services firms.

   About 28% of respondents expected Persian Gulf exports to return to pre-war 
levels by the second quarter of 2027, while 21% did not expect a return until 
2028 or later and 19% selected the first quarter of 2027.

   The broader survey showed oil and gas activity continued expanding during 
the third quarter of this year, although at a slower pace. The business 
activity index fell to 38.8 from 46.1 in the second quarter, while the oil 
production index increased to 20.7 from 15.0 and the natural gas production 
index rose to 14.8 from 3.7.




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