HOUSTON, March 27 (Xinhua) -- The Federal Reserve Bank of Dallas reported Wednesday that the southern U.S. energy sector activity grew modestly as oil price jumps in the first quarter (Q1) of 2019.
According to oil and gas executives responding to a Dallas Fed survey, the business activity index, the survey's broadest measure of conditions facing local energy firms, rose from 2.3 in Q4 last year to 10.8 in Q1 of 2019, but still well below the average level seen over the past few years.
The increase was mostly driven by oilfield services firms, with their business activity index jumping from 0 to 16.1, the report said, adding that positive readings generally indicate expansion, while readings below zero generally suggest contraction.
Oil and gas production increased for the 10th consecutive quarter, according to exploration and production executives. However, the oil production index fell from 29.1 in Q4 last year to 21.1 in Q1 of 2019, indicating a slower rate of growth. The natural gas production index also declined, from 24.8 to 16.7.
The company outlook index rebounded into positive territory this quarter, jumping 34 points to 23.3. The index measuring firms' uncertainty fell by 24 points to 18.6, suggesting that fewer firms noted rising uncertainty this quarter than last.
On average, respondents expected West Texas Intermediate, a grade of crude oil used as a benchmark in oil pricing, oil prices to be 60.19 U.S. dollars per barrel by year-end 2019.
Dallas Fed conducts the survey quarterly to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District, which covers Texas, northern Louisiana, and southern New Mexico.
Executive Director of the Paris-based International Energy Agency (IEA) Fatih Birol said earlier this month that the United States led the growth in global oil production and that it is expected to provide as much as 70 percent of increase in global oil supply in the next five years.
According to the IEA chief, U.S. oil export growth will nearly double today's level to 9 million barrels a day by 2024.
"By doing so, we expect it to overtake exports from Russia and come very close to export of Saudi Arabia which is the biggest oil exporter today," he said.
Furthermore, the United States will provide 75 percent of the increase in global natural gas supply by 2024, according to an outlook released by IEA.
Meanwhile, the U.S. Energy Information Administration has forecast that shale oil from Permian Basin will account for 50 percent of all new global oil production over the next five years.
The basin is located in a region of southeastern New Mexico and western Texas, two southern U.S. states bordering Mexico.
