Dallas Fed sees rising oil and gas outlook

OREANDA-NEWS. July 01, 2016. US oil and gas companies see an improved outlook after some growth in the second quarter of 2016, according to a survey of executives by the Federal Reserve Bank of Dallas.

A majority of executives said that business activity was stable in the second quarter while about a third said business activity expanded, according to the Dallas Fed's latest survey of US business activity.

"Outlooks improved or held steady for most firms, in a marked shift from last quarter," the agency said. The survey suggests some easing of the strong declines earlier in the year.

The survey includes companies in the agency's eleventh district which includes Texas, northern Louisiana and southern New Mexico.

Exploration and production companies reported that crude and natural gas production fell again in the second quarter, but at a slower pace than in the first.

Respondents were bullish on prices. More than 70pc expect higher crude prices in one year, and more than 50pc expect higher natural gas prices.

Oil and gas service companies said that declines in equipment use largely abated in the second quarter. Service companies have been especially hard hit because of the drop in oil prices.

Capital spending declines also moderated in the second quarter, particularly in the services sector. About 30pc of the companies surveyed reported cuts in spending, down from 60pc in the previous quarter.

Labor market indicators suggested that cuts to jobs, hours and compensation continued in the second quarter, but were less widespread.

The survey included 152 energy companies, including 67 E&P companies and 85 that provide support services.