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Energy in Fed Beige Book

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Federal Reserve Bank of Kansas City

Energy activity held steady compared to the previous
survey period, but expectations for future activity were
positive as the price of oil has continued to rebound.
Although oil prices were lower than a year ago, they
were still higher than most firms’ average price needed
to be profitable. Across the District, the number of active
oil and gas rigs continued to decline, especially in Oklahoma,
New Mexico, and Colorado. However, production
per rig continued to increase and overall oil and gas
production remained at high levels due to continued
productivity gains.
In addition, more than half of District
energy contacts expected pipeline capacity to increase
in the next year.

Federal Reserve Bank of Dallas

Energy activity grew modestly, and outlooks improved.
Production rose at a slow pace, but drilling activity continued
to slide as firms reined in spending, including
orders for new equipment. Oilfield services firms and
equipment suppliers noted surplus capacity for fracking
services and slim margins. Availability of additional pipeline
capacity out of the Permian Basin has propped up
crude oil priced in West Texas relative to the Gulf Coast.

Firms responding to the first-quarter Dallas Fed Energy
Survey, on average, expect the WTI oil price to be
around $60 per barrel at yearend 2019—above the
reported average breakeven price to profitably drill new
wells. Uncertainty in price outlooks declined partly because
contacts were more confident that OPEC would
sustain production cuts in the second half of the year.

Federal Reserve Bank of Atlanta

Energy sector contacts described District activity as
steady to up from the previous report. Offshore exploration
and production increased gradually in the Gulf of
Mexico, while onshore shale drilling remained robust.
Contacts described petrochemical refining and chemical
processing plant expansion activity as balanced from the
prior period, yet many expect an uptick in activity in
subsequent quarters. Crude oil export terminal project
planning and development continued along the Gulf
Coast, as businesses aim to capitalize on growing crude
oil exports. Firms engaged in natural gas and crude oil
pipeline projects noted that construction remained very
Utilities demand increased across residential,
commercial, and industrial sectors, due to the cold
weather and an uptick in industrial activity. Utilities contacts
shared they were initiating planning for power
transmission and distribution projects. Renewables
industry contacts also mentioned that various new projects
were in the planning stage, particularly construction
of wind and solar systems across the U.S.

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