Texas energy activity improves as uncertainty stays elevated

Oil and gas activity in the Eleventh District increased in the first quarter of 2026, according to the Dallas Fed Energy Survey, as the business activity index rose from -6.2 in the prior quarter to 21.0. The company outlook index also turned positive, moving from -15.2 to 32.2, while the outlook uncertainty index climbed further to 53.7. Oil and natural gas production were largely steady, with the oil production index improving to 0 and the gas production index edging up to 2.3.

Costs continued to move higher across the sector. Among oilfield services firms, the input cost index increased to 34.9, while exploration and production companies reported a jump in finding and development costs. Oilfield services companies also showed broader improvement, with equipment utilization turning positive and pricing for services strengthening. Employment demand was mostly stable overall, though employee hours and wages both increased from the previous quarter.

Survey respondents on average expect West Texas Intermediate crude to finish 2026 at $74 per barrel and Henry Hub natural gas at $3.60 per MMBtu. The report offers a fresh look at regional operating conditions across Texas, northern Louisiana, and southern New Mexico, giving investors another data point on activity levels, cost pressure, and pricing expectations. Readers tracking broader basin trends may also find Guardian Energy Partners’ coverage of Permian output estimates and oil and gas investing tax benefits useful for added context.

Source: Dallas Fed
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