With crude oil hitting $70 a barrel again this week, a study by the Federal Reserve Bank of Dallas reports that drilling activity 'expanded strongly' in the quarter that ends on Saturday, News Radio 1200 WOAI reports.
"Growth in the oil and gas sector remained robust in the second quarter, with the activity index coming in at its highest level since the Dallas Fed Energy Survey launched," Fed energy economist Michael Plante said. "Survey responses also point to a health labor market, with labor related indexes reporting strong growth in employment, and longer work hours in the sector."
The Dallas Fed says upstream, midstream, and downstream operators are all seeing strong growth, with drilling, exploration, pipelines, refineries and terminals showing robust activity.
Oil and gas production, especially in the Permian and Eagle Ford fracking fields, grew for the seventh quarter in a row, with optimism about future growth also hitting record highs.
But Plante said producers did cite potential problems on the horizon.
"Many executives mentioned limited crude oil pipeline capacity, and problems finding workers as issues that might constrain productivity,” he said.
Plante said there is also a concern about a creeping increase in inflation which is raising prices for oilfield materials, employees, and services.