Activity in the oil and gas sector increased at the beginning of 2026 after nearly a year of uncertainty and pessimism, Federal Reserve Bank of Dallas data showed Wednesday.
The Dallas Fed’s quarterly survey ― which polled oil and gas executives at 135 firms across Texas, northern Louisiana and southern New Mexico earlier this month ― found that uncertainty is still lingering in the oil patch.
“Activity rose for the first time in almost a year, accompanied by a broad-based improvement in the operating environment for oil and gas support service firms,” Michael Plante, an assistant vice president at the Dallas Fed, said. “The ongoing conflict in the Middle East, however, has generated substantial uncertainty for firms about the near-term outlook.”
Oil prices slid about 4% on Wednesday on reports that the U.S. had sent Iran a proposal aimed at ending the war, prompting talk of progress toward a ceasefire, Reuters reported.
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U.S. West Texas Intermediate crude fell to $88.78.
In light of recent oil price increases, the survey asked executives if the number of wells their firm expects to drill has changed since the start of the year.
Nearly 70% of executives at large exploration and production firms, who make up majority of the U.S. crude oil production, reported no change to their plans, while almost 60% of smaller firms increased the number of wells they expect to drill in 2026.
“This suggests some interest among some firms to increase activity in response to the recent increases we’ve seen in WTI oil prices,” Plante said.
The business activity index, which is the survey’s broadest measure of conditions facing the district’s energy firms, jumped to 21 points this quarter, indicating an expansion in activity. Last quarter the activity index was -6.2.
The outlook index also notably rose, reaching 32.2 this quarter. The large uptick signals an improving outlook among firms, though uncertainty about the outlook remains elevated, with the uncertainty index climbing from 43.4 at the end of last year to 53.7 this quarter.
Overall, oil and natural gas production was relatively unchanged from last quarter, with the oil production index hitting 0, up from -3.4, and the natural gas production index at 2.3, an increase from 0.
The employment index, reported at 0.8, suggested little to no growth in overall employment, however the employee hours index increased.
Respondents said, on average, they expected a West Texas Intermediate oil price of $74 per barrel by the end of the year with responses ranging from $50 to $135 per barrel.
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This reporting is part of the Future of North Texas, a community-funded journalism initiative supported by the Commit Partnership, Communities Foundation of Texas, The Dallas Foundation, the Dallas Mavericks, the Dallas Regional Chamber, Deedie Rose, Lisa and Charles Siegel, the McCune-Losinger Family Fund, The Meadows Foundation, the Perot Foundation, the United Way of Metropolitan Dallas and the University of Texas at Dallas. The News retains full editorial control of this coverage.