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ENB Pub Note: Excellent update from the Dallas Fed. You can check the full report here.
We will be covering the next Energy News Beat Stand-up.
Activity in the oil and gas sector edged lower in fourth quarter 2025, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index, the survey’s broadest measure of the conditions energy firms face in the Eleventh District, remained negative, though relatively unchanged at -6.2 in the fourth quarter.
The company outlook index, while also still negative, improved slightly from -17.6 in the third quarter to -15.2, suggesting continuing pessimism among firms. Meanwhile, the outlook uncertainty index remained elevated and was relatively unchanged at 43.4.
Oil and gas production was little changed in the fourth quarter, according to executives at exploration and production firms. The oil production index remained negative, though it advanced from -8.6 in the third quarter to -3.4. The natural gas production index increased slightly from -3.2 to 0.
Costs increased at a slower pace when compared with the prior quarter. The input cost index for oilfield services firms declined from 34.8 to 24.4. Among exploration and production firms, the finding and development costs index remained positive but fell from 22.0 to 5.7. Also, the lease operating expenses index decreased slightly from 36.9 to 28.4.
Oilfield services firms reported modest deterioration in nearly all indicators. The equipment utilization index for oilfield services firms was relatively unchanged at -12.2. The operating margin index also remained negative and was relatively unchanged at -31.7, indicating margins compressed at a similar rate. Meanwhile, the prices received for services index declined slightly from -26.1 to -30.0.
Overall, demand for employees fell, and those on the job tended to work fewer hours. The aggregate employment index declined from -1.5 in the third quarter to -10.8 in the fourth quarter. Additionally, the aggregate employee hours index declined from -3.7 to -9.3. Meanwhile, the aggregate wages and benefits index remained positive but declined slightly from 11.5 to 6.2.
On average, respondents expect a West Texas Intermediate (WTI) oil price of $62 per barrel at year-end 2026; responses ranged from $50 to $82 per barrel. When asked about longer-term expectations, respondents on average said they expect a WTI oil price of $69 per barrel two years from now and $75 per barrel five years from now. Survey participants foresee a Henry Hub natural gas price of $4.19 per million British thermal units (MMBtu) at year-end 2026. When asked about longer-term expectations, respondents on average said they anticipate a Henry Hub gas price of $4.57 per MMBtu two years from now and $5.00 per MMBtu five years from now. For reference, WTI spot prices averaged $59.00 per barrel during the survey collection period, and Henry Hub spot prices averaged $4.84 per MMBtu.
West Texas Intermediate Crude
