The greatest threat to growth in the U.S. oil and natural gas sector is a market shifting deeply to the supply-side, a survey of industry leaders found.

DNV GL, a Norwegian company providing risk management advice, said a survey of 813 senior oil and gas professionals revealed concerns about an oversupplied market. Strong growth in U.S. shale oil production and a previous practice from the Organization of Petroleum Exporting Countries to defend a market share with more output left the market oversupplied and contributed to a drop in oil prices below $30 per barrel in early 2016.

"The survey indicates that the greatest perceived barrier to growth in the United States is over-supply of oil and gas," the company's report read. "This was cited by twice the number of respondents in the United States compared to globally."

OPEC in January 2017 started implementing an agreement, with help from Russia, that sidelined about 2 percent of the global demand in an effort to erase the surplus on the five-year average of crude oil inventories. That effort is now in its second year and some OPEC players are calling for long-term production cuts.

The agreement, and its strong compliance so far, has helped pull crude oil prices to four-year highs. The price for Brent crude oil, the global benchmark, is now trading above $70 per barrel.

That rise, however, coincides with forecasts that total U.S. oil production could reach a point this year that would rival that of Saudi Arabia. The Americas arm of DNV GL said renewed concerns of an oversupplied market helped explain why more than a third of the respondents said cost management would be their top priority this year, compared with less than a quarter last year.

"With the price of oil stabilizing, offshore developments are now able to attain better margins and our survey indicates a cautious turnaround in optimism for the U.S. oil and gas industry," Frank Ketelaars, DNV GL's regional manager, said in a statement emailed to UPI. "However, it's still a very tough market, so it is not surprising to see a further increase in focus on cost control for 2018."

Nevertheless, most respondents, 69 percent, said their companies would at least keep capital spending the same as last year. That's compared with 47 percent who said the same thing last year.

A survey of 134 energy firms from Dec. 13-21 by the Federal Reserve Bank showed an index measuring confidence had its first sign of reduced uncertainty since the first quarter of 2017. Most of that optimism came from drilling services companies, those that were hit hard by the market downturn in early 2016.

Texas is the No. 1 oil producer in the United States. Earlier this month, Todd Staples, the president of the Texas Oil and Gas Association, said the exploration and production side of the industry should drive capital investments in the region this year.

In its assessment of industry confidence, DNV GL's survey found the outlook in North America improved from 49 percent last year to 57 percent. It was Latin America, however, that saw the greatest improvement, jumping from 31 percent in 2017 to 77 percent.

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