Tenth District Energy Activity Fell at a Steep Pace Federal Reserve Reports

The Federal Reserve Bank of Kansas City (Kansas City, Mo.) released the first quarter Energy Survey April 7. The survey revealed that energy activity in the Tenth District decreased at a steep rate and expectations for future activity dropped further, according to Chad Wilkerson, Oklahoma City Branch executive and economist at the Federal Reserve Bank of Kansas City.

“District energy activity fell sharply during the first quarter of 2020, with our index dropping to its lowest level since we began the survey in early 2014,” said Wilkerson. “Expectations for future activity also fell to their lowest level since late 2014, as most firms do not expect energy prices to return to profitable levels this year.”

The Kansas City Fed’s quarterly survey provides information on current and expected activity among energy firms in the Tenth District by monitoring oil and gas-related firms located and/or headquartered in the Tenth District, with results based on total firm activity. Survey results reveal changes in several indicators of energy activity, including drilling, capital spending, and employment. Firms also indicate projections for oil and gas prices. All results are diffusion indexes–the percentage of firms indicating increases minus the percentage of firms indicating decreases. A summary of the first quarter survey, as well as results from past surveys and release dates for future surveys can be found at https://www.kansascityfed.org/research/indicatorsdata/energy.

The Federal Reserve Bank of Kansas City serves the Tenth Federal Reserve District, encompassing the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma, and Wyoming; and the northern half of New Mexico. As part of the nation’s central bank, the Bank participates in setting national monetary policy, supervising and regulating numerous commercial banks and bank holding companies, and providing financial services to depository institutions. More information is available at www.kansascityfed.org.

SOURCE: The Weekly Propane Newsletter, April 9, 2020. Subscribe for all the latest posted and spot prices from all major terminals and refineries around the U.S., including a center spread of posted prices with hundreds of postings completely updated and delivered to inboxes each week, along with market analysis, insightful commentary and much more.