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Dallas Fed survey shows oil and gas firms picking up

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Oil and gas companies saw activity pick up sharply in the second quarter after contracting earlier this year, according to a Federal Reserve Bank of Dallas survey released Wednesday.

Energy executives from Texas, southern New Mexico and northern Louisiana indicated their businesses even showed signs of expanding, the survey showed.

More than half of respondents said the activity from their businesses, which range from oil exploration and production to support services, were level with the previous three months. The long-declining industry has been waiting for signs of perking up as oil prices have slumped.

“I think a key word here is ‘stabilization’ in business conditions,” Dallas Fed senior research economist Michael Plante said in a statement.

Oil and natural gas production firms reported the decline in their business had slowed, and the use of equipment reported by other firms picked up. More than half of exploration and production firms reported a rosier six-month outlook than earlier in the year, according to the survey. The average expected price for West Texas Intermediate oil for year-end was $54.80 per barrel, the survey showed, with expectations varying widely from as low as $35 to $70 per barrel. The price is currently hovering below $50 per barrel.

It’s unknown whether the survey will show further momentum in the back half of the year as crude oil prices have dipped since the U.K. voted to leave the European Union earlier this month, which sent markets reeling. The Dallas Fed survey was conducted between June 15-23 before results of the vote were known.

TAGS: Oil, Gas, Production, Crude

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