Logan: Significant short-term growth in U.S. oil production is unlikely, and inflation remains the main cause for concern

Federal Reserve Bank of Dallas President Lori Logan stated at a conference on Thursday that American oil producers are unlikely to significantly increase output in the near future, thereby easing pressure on rising gasoline prices for consumers. She noted that to start new wells, producers need oil prices slightly below $70 per barrel, which is significantly lower than the current level of around $110. Logan added that only with sustained prices at this level will companies be willing to make the necessary investments, ultimately helping to lower prices for consumers. Logan said, “American oil companies need to be confident that high prices will last for some time, so I haven't heard any news about a significant increase in production in the near future.” According to her, although the U.S. has advantages that countries near conflict zones do not, the rise in energy prices related to the U.S. and Israel's war against Iran will still exert short-term pressure on inflation and economic activity. Logan emphasized that inflation remains one of her main economic concerns. She said, “Even before the Middle East conflict began, I wasn't confident that we were steadily moving toward the 2% inflation target. Restoring price stability and reducing inflation to 2% are vital because stable inflation is the foundation of a strong economy.” Logan agreed with many colleagues’ opinions, noting that the current high uncertainty requires the Fed to maintain a wait-and-see stance and closely monitor economic data. She emphasized, “Right now, I tend to view issues through scenario analysis. I believe that policy is ready to be adjusted based on incoming data, and we are prepared to change course when appropriate.”