Dallas Fed Energy Survey Shows Oil and Gas Activity Decline

Activity in the oil and gas sector edged lower in the fourth quarter of 2025, according to oil and gas executives responding to the Dallas Fed Energy Survey.

That’s what the Federal Reserve Bank of Dallas said recently in a statement posted on a Dallas Fed Energy Survey page on its website, adding that the business activity index – which it described as 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,” the Dallas Fed added.

“Meanwhile, the outlook uncertainty index remained elevated and was relatively unchanged at 43.4,” it continued.

The Dallas Fed went on to state that 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,” it noted.

Costs increased at a slower pace when compared with the prior quarter, the Dallas Fed said, adding that 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,” it highlighted.

Oilfield services firms reported modest deterioration in nearly all indicators, the Dallas Fed pointed out.

“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,” it said.

“Meanwhile, the prices received for services index declined slightly from -26.1 to -30.0,” it added.

The Dallas Fed went on to note that, overall, demand for employees fell, and said 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,” it stated.

“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,” it added.

The Dallas Fed highlights on its site that it conducts the Dallas Fed Energy Survey quarterly “to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District”.

The Eleventh District encompasses Texas, northern Louisiana and southern New Mexico, the Dallas Fed points out, adding that firms are asked whether business activity, employment, capital expenditures and other indicators increased, decreased or remained unchanged compared with the prior quarter and with the same quarter a year ago.

“Survey responses are used to calculate an index for each indicator,” the Dallas Fed notes.

“Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase,” it adds.

“When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the previous quarter,” it continues.

“If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the previous quarter,” it goes on to state.

The Dallas Fed outlines on its site that the information collected as part of the Dallas Fed Energy Survey “is a valuable component of economic analysis and serves as input for Federal Open Market Committee monetary policy deliberations”.

Data for the latest Dallas Fed Energy Survey was collected from December 3 to December 11, according to the Dallas Fed, which revealed on its site that 131 energy firms responded to the fourth quarter survey. Of these respondents, 90 were exploration and production firms and 41 were oilfield services firms, the Dallas Fed highlighted.

In a statement posted on its Dallas Fed Energy Survey page back in September, the Dallas Fed noted that “activity in the oil and gas sector declined slightly in the third quarter of 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 but edged up from -8.1 in the second quarter to -6.5 in the third quarter,” the Dallas Fed said in that statement.

In a statement posted on the page back in January, the Dallas Fed stated that “activity in the oil and gas sector increased slightly in fourth quarter 2024, 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, increased from -5.9 in the third quarter to 6.0 in the fourth quarter,” it added.

The Federal Reserve Bank of Dallas is part of the Federal Reserve System, the central bank of the United States, the Dallas Fed highlights on its site, adding that “the Fed has a public mission: We serve the American people by promoting a strong financial system and a healthy economy for all”.

To contact the author, email andreas.exarheas@rigzone.com