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US shale executives expect to drill significantly fewer wells this year than planned at the start of 2025, as lower oil prices and uncertainty around President Donald Trump’s tariffs hurt profits, according to a Federal Reserve Bank of Dallas survey.

Almost half of oil executives said they expect to drill fewer wells in 2025 than planned at the start of the year, according to second-quarter survey results released Wednesday. For “large” exploration and production firms — producing 10,000 barrels per day or more — 42% said they expected a significant decrease in the number of wells drilled. Most firms said that tariffs have increased the cost of drilling and completing a new well by 4.01% to 6%.

The responses highlight the headwinds facing domestic production, leading industry executives to take a cautious approach to drilling and spending in direct contrast to Trump’s “drill, baby, drill” rhetoric. Crude prices have fallen as Trump’s tariffs threaten to slow the global economy, while OPEC+ accelerates the revival of its production into a market that was already well supplied.

“It’s hard to imagine how much worse policies and D.C. rhetoric could have been for US E&P companies,” an unidentified executive said in the report. “We were promised by the administration a better environment for producers but were delivered a world that has benefitted OPEC to the detriment of our domestic industry.”

A majority of executives surveyed said they expect Trump’s tariffs on imported steel to weigh on customer demand over the next 12 months.

Some executives called for US steel producers to increase output, as the uncertainty in casing prices for essential steel tubing is delaying drilling activity. For service companies, tariffs mean they have to pass the cost on to their customers, one respondent said.

The Dallas Fed’s quarterly surveys are widely read for the anonymous comments that offer an unfiltered view on factors impacting the oil industry. The bank’s region covers Texas, northern Louisiana and southern New Mexico.

“It is a tough marketplace right now,” said one respondent. Most firms are holding contractors well below what they need to remain profitable, the respondent added.

Oilfield service companies often provide the first indication of an industry downturn because they’re the ones hired to drill and frack new wells. “There is a concern some of our vendors will not survive,” one oil executive said.

“Our customers (exploration and production firms, or E&Ps) are refusing to help absorb these costs,” one oilfield service executive said. “E&Ps continue to speak out of both sides of their mouths. They talk partnership but are treating their vendors like second-class citizens, pushing OFS to unsustainable margins.”

Source: Bloomberg Europe

source :cnbc

Dollar Rebounds on US Data but Path Forward Not Clear

Dollar Bears Need Soft Data to Justify Bearish Bets

USD/JPY Technical Analysis

Source: investing

Australia's retail sales lower than expected at 0.2%

RBA expected to trim next week

US nonfarm payrolls expected to drop to 110 thousand

AUDUSD Technical

AUDUSD 4-Hour Chart, July 2, 2025

Source: marketpulse

Treasuries fell as weaker-than-anticipated US employment data was overpowered by a selloff in the UK government bond market that focused investor attention on deficits in both nations.

Yields rose the most for longer-dated bonds with 30-year Treasuries climbing about six basis points to 4.83%. The market was, in part, following moves in the UK, where yields on 30-year gilts jumped on concerns about Chancellor of the Exchequer Rachel Reeves’ future reignited questions over the nation’s fiscal position.

Investors have raised similar concerns about the outlook in the US, where on Tuesday the Senate passed President Donald Trump’s sweeping tax and spending bill that would add an estimated US$3.4 trillion (RM14.26 trillion) to the nation’s debt over a decade. The legislation is now in the hands of the House as Republicans rush to complete work on the legislation by a July 4 deadline set by the president.

“The UK long end is getting crushed and that market is thin so it’s taking all long duration higher in yield,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities.

“With both UK and US fiscal trajectories in the spotlight and long-end yields rising accordingly, markets are recalibrating their view of the term premium — even as short-end expectations remain anchored by the potential for rate cuts,” says Brendan Fagan of Bloomberg FX Strategist.

The market briefly pared losses earlier in the session after a report on private-sector payrolls showed an unexpected slump in June, a sign of weakness in the US labour market.

Yields for two-year notes, which are more sensitive to monetary policy, erased an increase of nearly three basis points, to trade little changed following the release of ADP figures showing a drop of 33,000 in payrolls last month.

Investors are turning to Thursday’s jobs report, the third and most comprehensive to be released this week on US labour market conditions. If that data shows further weakness, traders reckon that the Fed could move up cuts. Following the ADP report, traders added to wagers on at least two cuts this year, with the first coming in September.

A “general softening trend among many labor market indicators is really the story,” said Angelo Manolatos, a rates strategist at Wells Fargo. “That softening likely puts the Fed in a position to cut rates later this year, likely starting in September.”

The prospect of Fed cuts propelled the Treasury market in June to its best monthly performance since February. Yields dropped last week to their lowest level in more than a month. And open interest data shows traders added new long positions into the recent bond market rally.

“If there’s a material increase in the unemployment rate it will change the calculus in the market’s mind about the timing and pace of rate cuts,” said Dominic Konstam, head of macro strategy at Mizuho Securities USA.

Source: Theedgemarkets

source :marketscreener