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The Federal Reserve Bank of Dallas released its quarterly survey of approximately 200 oil and gas firms located or headquartered in the 11th District (see illustration) September 28, 2016. The Survey measures the firms’ business activities over the last quarter, reporting whether they increased, decreased or remained static. The results are used to help guide the Federal Open Market Committee’s monetary policy deliberations.

As felt on the street, the Survey notes that oil and gas activity increased in the 3rd Quarter. Production continues to decline, albeit at a slower rate. Capital spending expanded while the labor market indicators contracted, despite static labor reports from survey participants. 62% believe the price of oil will be higher in a year’s time.

The Survey includes a Comments section, which prints verbatim quotes from respondents, like the following:

“The lack of precision in global information as to supply and demand plagues us all. Anecdotal evidence of economic conditions move markets irrationally. Knowledge, or more accurately, lack of knowledge, of when oil will rebalance is palpable. There is paralysis from analysis that prevents rational deployment of capital.”

My personal favorite quote from an imagined “old salt” at a service company:

“So many companies have depleted their ranks of older, knowledgeable workers that when this finally turns around, the number of mistakes the “newbie” replacements will make will be horrifying and will increase workplace deaths markedly, the closer you get to the rigs, pipelines, plants, etc., in the “fields”.  Across the board, new college grads have hollow grades—they look good but benefited from grade inflation, and they’re actually undereducated by and large compared with my generation. Their work ethic, by and large, is poor, and their salary demands are extreme.”

The Survey can be found HERE. 

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