The Federal Reserve Bank of Dallas published its first-quarter 2026 Energy Survey showing oil and gas activity among Eleventh District firms returned to expansion, with the business activity index rising 27 points to 21. Firms also reported a stronger outlook, although uncertainty remained elevated, which the Dallas Fed linked to the ongoing conflict in the Middle East. Oil and natural gas production was broadly flat, with the oil production index at 0 and the natural gas production index at 2.3. Employment indicators suggested little to no growth (employment index at 0.8), while aggregate employee hours and wages and benefits increased. Cost pressures rose versus the prior quarter, including higher input costs for oilfield services firms and higher finding and development costs. Oilfield services firms reported improvement across most measures, with equipment utilization turning positive and prices received moving above zero, though operating margins remained negative. In special questions, 50 percent of respondents reported no change to 2026 drilling plans since the start of the year, with increases more common among small exploration and production firms than large firms. Executives estimated the average West Texas Intermediate price needed to cover operating expenses for existing wells at about USD 43 per barrel and the price to profitably drill a new well at USD 66 per barrel. The survey was based on 135 responses collected March 11–19 from firms headquartered in Texas, southern New Mexico and northern Louisiana.
Federal Reserve Bank of Dallas 2026-03-25
Federal Reserve Bank of Dallas Energy Survey finds oil and gas activity expands in first quarter 2026 while outlook uncertainty climbs
The Federal Reserve Bank of Dallas reported that oil and gas activity in the Eleventh District returned to expansion in the first quarter of 2026, with the business activity index rising 27 points to 21 and firms citing a stronger but uncertain outlook tied to the Middle East conflict. Production and employment were broadly flat, while cost pressures increased and oilfield services firms saw improved utilization and pricing but continued negative operating margins. Executives cited an average West Texas Intermediate price of about USD 43 per barrel to cover operating expenses for existing wells and USD 66 per barrel to profitably drill a new well.