Surveys and reports from the Federal Reserve Bank of Dallas are now available for the third quarter. The business activity index – the survey’s broadest measure of conditions facing Eleventh District energy firms – was up from 13.8 in the second quarter to 26.7. While the survey still shows weakness in both industry employment and production, it does show some encouraging improvement. Oil and gas production, according to E&P firms, fell for the third consecutive quarter, yet at slower rate.
Also of note in the report was the poll the Fed conducted that received participation from 149 oil and gas executives. They asked,
What WTI price do you think is necessary for U.S. crude oil drilling activity to substantially increase?
In an almost unanimous response, executives believe that $50 per barrel is the magic mark, with some indicating $55 as the number that will allow substantial increases in activity. Below is the graph that shows the poll results.
Results also showed that most executives did not expect the price of oil to rise until at least the middle of the second quarter 2017.
To read the rest of the report go to the Dallas Federal Reserve website. You can also sign up there to be one of their survey panelists.