The Federal Reserve Bank of Dallas reports third quarter activity in the texas oil and gas fields showed strength, but at a slower pace than the second quarter, News Radio 1200 WOAI reports.
Economist Michael Plante says much of the stumble in the third quarter was due to the uncertainty in the direction of global oil prices.
"Oil prices continue to be depressed this quarter relative to the start of the year, and this has restrained growth in the sector," he said.
The oil industry itself has absolutely no idea where prices are heading in the near term.When asked by the Dallas Fed where they expect oil prices to be at the end of 2018 responses from oil industry executives ranged from $40 a barrel to $63.
Plante says even though Hurricane Harvey hit in a key region for the oil industry, which is filled with refineries and the Eagle Ford shale field, Plante says drillers feel long term impacts from Harvey will not be significant."
Respondents reported widespread but limited impacts on their operations due to Hurricane Harvey, and most feel these effects will be gone six months from now," he said.
But Plante says for refineries, many of which were blown out of commission for weeks by Harvey, there is a little less bullish outlooks.
"When asked bout the broader energy sector, which includes refineries, many believe there will be some minor lingering effects six months from now," he said.
Labor market indexes point to rising employment and employee hours, albeit at a slower pace than the last quarter," the Dallas Fed reported, adding that oil and gas production in Texas increased for the fourth quarter in a row.