By Colin Kellaher
Energy activity in the middle of the U.S. fell moderately in the fourth quarter as oil prices dropped, and expectations for future activity also declined, according to a survey by the Federal Reserve Bank of Kansas City.
The quarterly Tenth District Energy Survey's key index of drilling and business activity fell to -13 in the fourth quarter from 45 in the third quarter, marking the first quarterly decline in nearly three years.
The bank said a drop in oil prices led to some pullback in activity during the quarter, adding that several companies reduced their 2019 capital spending plans.
The survey's future drilling and business activity index also plummeted, falling to -19 from 57--the first negative posting since early 2016, the bank said.
Companies surveyed said they need to see average oil prices of $63 a barrel to prompt a substantial increase in drilling, but that they expect oil will only reach the mid- to high-$50s this year. West Texas Intermediate futures, the U.S. oil standard, were down 1.64% at $51.73 a barrel on the New York Mercantile Exchange around midday Friday.
The Kansas City Fed's survey monitors oil- and gas-related companies located or based in the Tenth District, which includes Colorado, Oklahoma, Wyoming, Nebraska, Kansas, the northern half of New Mexico and the western third of Missouri.
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