Uncertainty and pessimism continued to weigh on oil and gas activity in recent months, Federal Reserve Bank of Dallas data showed Wednesday.
The Dallas Fed’s quarterly survey ― which polled oil and gas executives at 131 firms across Texas, northern Louisiana and southern New Mexico in early December ― found the industry to be in a period of stagnation.
Crude oil prices were down to a 4-year low this week as West Texas Intermediate fell to about $55 per barrel, the lowest since February 2021 during the COVID-19 pandemic, outlets reported Tuesday. The price drop is likely a symptom of a widely expected supply glut.
The business activity index, which is the survey’s broadest measure of conditions, came in at -6.2, suggesting a small decline in activity since last quarter.
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The outlook index at -15.2, though slightly improved from -17.6 last quarter, signaled continued pessimism among firms with the uncertainty index remaining elevated and relatively unchanged at 43.4.
“The oil and gas industry has been in the doldrums recently,” Michael Plante, an assistant vice president at the Dallas Fed, said in a news release. “While oil prices have not been low enough this quarter to force a substantial cutback in activity, they were not high enough to support any growth either.”
Overall, oil and natural gas production was relatively unchanged from last quarter, with the oil production index hitting -3.4, up from -8.6, and the natural gas production index at 0, an increase from -3.2.
Both employment and employee hours declined in the fourth quarter. The equipment utilization index for oilfield services was -12.2, also pointing to a decline.
Respondents said they expect a West Texas Intermediate oil price of $62 per barrel by the end of 2026.
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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.