The Dallas Fed Energy Survey’s Q2 assessment of oil and gas firms in the Eleventh District showed that oil and gas activity deteriorated in Q2, according to oil and gas executives who responded to the survey.
The survey’s main measure of the state of energy firms in the district—the business activity index—fell from -50.9 in Q1 to -66.1 in Q2. It is the lowest in the history of the survey, which began in 2016. This index, the Dallas Fed said, “was indicative of significant contraction in activity.”
For oilfield service firms, the business activity index saw the biggest contraction, crashing from -46.3 in Q1 to -73.5 in Q2. For E&P companies in the district, the index fell from -53.3 to -62.6.
The oil production index is at an all-time low for the survey after falling from -26.6 to -62.6. The natural gas production index also fell significantly, as did E&P and oilfield services capex indexes. The energy employment index was negative for the fifth consecutive quarter, alluding to more job cuts in the industry.
The Dallas Fed also survey respondents for oil price outlooks. The average expectation for WTI is $42.11 per barrel by the end of this year, with a wide range of responses from $22 to $65 per barrel.
Data for the survey was collected between June 10 and June 18, with 168 firms responding.
The Dallas Fed Energy Survey samples about 200 companies and covers upstream energy firms located or headquartered in the Eleventh Federal Reserve District—Texas, southern New Mexico and northern Louisiana—home to the Barnett, Eagle Ford, Haynesville, and Permian basin. The survey covers exploration and production (E&P) companies and oil and gas support services firms, but does not include pipeline companies or refiners.