Oil and gas activity described as “flat” in Texas, New Mexico and Louisiana

About the Dallas Fed - Dallasfed.org


Activity in the oil and gas sector was unchanged in second quarter 2023, according to oil and gas executives responding to the Dallas Fed Energy Survey.

The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—edged down to zero in the second quarter from 2.1 in the first.

The Eleventh Federal Reserve District consists of Texas, northern Louisiana and southern New Mexico. So it entails the Permian Basin, the Eagle Ford and the Haynesville, all prominent oil and gas producing areas.

Oil and natural gas production increased at a slower pace compared with the prior quarter, according to executives at exploration and production (E&P) firms. The oil production index was 8.0 in the second quarter versus 10.5 in the first. Meanwhile, the natural gas production index declined to 2.1 from 7.4.

Firms reported rising costs for a 10th consecutive quarter. While the indexes remain above series averages, the rate of cost increases slowed. Among oilfield services firms, the input cost index remained positive but fell sharply to 41.2 from 61.6. Among E&P firms, the finding and development costs index plummeted to 14.9 from 46.8. Additionally, the lease operating expenses index declined to 26.0 from 37.6.


Oilfield services firms reported deterioration in most indicators. The equipment utilization index turned negative, falling to -7.9 in the second quarter from 3.9 in the first. The operating margin index tumbled to -21.6 from 1.9. The index of prices received for services remained positive but decreased to 3.9 from 25.0.

U.S. natgas flat as rising crude offsets falling global gas prices | Reuters

The aggregate employment index posted a 10th consecutive positive reading and was relatively unchanged at 13.1. Similarly, the aggregate employee hours index was relatively unchanged at 10.5. Meanwhile, the aggregate wages and benefits index declined to 34.5 from 43.6.

The company outlook index remained negative in the second quarter but moved up to -9.1 from -14.1. The overall outlook uncertainty index remained positive but plunged 26 points to 36.9, suggesting that while uncertainty continued to increase on net, fewer firms noted a rise this quarter than last quarter.

On average, respondents expect a West Texas Intermediate (WTI) oil price of $77 per barrel by year-end 2023; responses ranged from $60 to $100 per barrel. Survey participants expect a Henry Hub natural gas price of $2.97 per million British thermal units (MMBtu) at year-end. For reference, WTI spot prices averaged $69.89 per barrel during the survey collection period, and Henry Hub spot prices averaged $2.03 per MMBtu.

Source: Federal Reserve Bank release