**Dallas Fed Survey: Uncertainty in Oil and Gas Sector Climbs, Yet E&P Spending Plans Remain Buoyant**
The latest Dallas Fed Energy Survey highlights a discernible shift in the oil and gas industry, marked by heightened uncertainty but resilience in exploration and production (E&P) spending plans. Executives from E&P and service firms spanning parts of Texas, New Mexico, and Louisiana voiced their sentiments in the mid-September survey, painting a complex picture of rising uncertainty and moderate optimism.
### Increasing Uncertainty
With 57% of respondents indicating a greater degree of uncertainty, the survey reflects a significant escalation in apprehension among industry leaders. This increase is attributed to both economic outlook concerns and the impending U.S. presidential election. The level of uncertainty has doubled from the second quarter, reaching its highest point since early 2023.
The COVID-19 pandemic’s lingering effects and ongoing regulatory challenges contribute to the growing uncertainty. Executives are cautious, with some hesitation evident in their planning discussions for 2025, particularly when it comes to managing resources in a potentially volatile commodity environment.
“Recent volatility has started to impact planning discussions for 2025,” noted one respondent. “We have not adjusted our plan yet, but we are starting to work on potential drilling plans for a lower-commodity environment.”
Another executive underscored the industry’s preference for capital allocation post-election: “The oil community prefers to await the allocation of capital until after the election.”
### Positive Outlook on Spending
Despite the increasing uncertainty, E&P firms have maintained a robust outlook on capital expenditures (capex). About 36% of executives expect to increase spending over the next 12 months, aligning with the second-quarter levels. This resilience is significant given the backdrop of short-term delays in projects and supplier delivery times.
However, there are signs of caution. The number of respondents planning to reduce spending rose to 24% from 19%, signaling a more nuanced approach to financial planning.
### Oil