Oil and Gas Sector Expands but Slows Down in Third Quarter
The oil and gas sector continued to expand in the third quarter of 2026, but at a slower pace than in the second quarter. According to the Dallas Fed Energy Survey, the business activity index declined from 46.1 to 38.8, indicating that the growth rate slowed down. However, the index remained positive, suggesting that the sector is still experiencing solid growth.
The outlook for oil and gas production was divergent between exploration and production (E&P) firms and services firms. E&P firms were more optimistic, with an outlook index of 50.0, while services firms were much more neutral, with an outlook index of 4.6. The overall outlook uncertainty index remained essentially unchanged at 29.8.
Both oil and natural gas production rose in the third quarter, according to E&P executives. Oil production increased from 15.0 in the second quarter to 20.7 in the third, while natural gas production climbed from 3.7 to 14.8.