The Federal Reserve Bank of Dallas finds some remnants of the downturn lingering in the state energy sector, though optimism is starting to take hold. File Photo by Gary C. Caskey/UPI | License Photo
DALLAS, Sept. 29 (UPI) -- Remnants of a slump in the oil and gas sector are still evident in the Texas economy even as signs of improvement emerge, a bank survey found.
A survey of business activity from the Federal Reserve Bank of Dallas finds support for a general expansive sentiment for energy firms. Those companies tied to the exploration and production side of the energy sector showed contraction, but at a slower pace than previous quarters.
Michael D. Plante, a senior economist with the Dallas Fed, said that, generally speaking, the oil and gas sector showed signs of recovery during the third quarter.
"With that being said, signs of the slump still remain visible as employment indicators remained soft, and respondents expressed concerns about continued oversupply in the oil market," he said in a statement.
The Texas Railroad Commission, the state energy regulator, reported this week that daily production for July was up slightly from earlier this year. The recovery comes as crude oil prices are holding steady in the mid $40-per-barrel range and energy companies are starting to show resilience to what was abnormal just two years ago when crude oil prices were about $100 per barrel.
Texas Railroad Commissioner Christi Craddick, whose agency is charge of energy in the state, said the Permian shale basin in particular showed strong signs of strength even as pressure in the broader sector remains.
"The Permian basin's current and potential production, for Texas and our nation, is truly invaluable," he said in a separate emailed statement.
The Dallas bank said that most companies working in the state energy sector were bullish, with more than 60 percent saying in a survey they expected crude oil prices to move higher in the coming one-year period.
The labor market in Texas contracted during the third quarter, however, with most companies standing pat on jobs, hours and wages.