Kansas City, MO, January 11, 2026
The latest survey from the Federal Reserve Bank of Kansas City indicates a significant decline in energy activity in the Tenth District, marking the lowest levels recorded in five years. Local businesses face challenges as this downturn is expected to continue over the next six months. Despite the obstacles, the entrepreneurial spirit in Oklahoma City remains strong, emphasizing the need for innovation and strategic planning within the energy sector.
Kansas City, MO – Energy Activity Declines to Five-Year Low
The Federal Reserve Bank of Kansas City’s latest survey reveals a significant downturn in energy activity within the Tenth District, marking the lowest levels in five years. This decline is expected to persist over the next six months, posing challenges for local businesses and the broader economic landscape.
The recent findings highlight the resilience of Oklahoma City’s entrepreneurial spirit while underscoring the necessity for a robust and adaptable regulatory environment. As local energy firms navigate market fluctuations, the importance of innovation and strategic planning becomes paramount for those looking to push through economic headwinds.
Key Findings
- Drilling and Business Activity Index: The index plummeted to -39 in the fourth quarter of 2025, a sharp drop from -16 in the previous quarter and -17 a year prior. This indicates a substantial decrease in drilling and business activities.
- Revenues and Profits: Both metrics fell further, reaching -33 and -42 respectively, the lowest levels in two years.
- Employment Levels: Employment contracted modestly, with the employment index at -3, suggesting a slight reduction in workforce.
Profitability Thresholds
Firms reported the following average prices required for drilling to be profitable:
- Oil: $61 per barrel
- Natural Gas: $3.80 per million Btu
For a substantial increase in drilling activity, the necessary prices are:
- Oil: $75 per barrel
- Natural Gas: $4.89 per million Btu
Future Outlook
Looking ahead, firms anticipate further declines in drilling activity, revenues, profits, employment, and capital expenditures over the next six months. The expected drilling activity index dropped from 0 to -19, and expected revenues decreased from 3 to -22, marking the lowest readings in over two years, signaling the urgent need for local entrepreneurs to innovate and adapt.
Background
The Federal Reserve Bank of Kansas City’s Energy Survey monitors energy firms in the Tenth District, which includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and parts of western Missouri and northern New Mexico. The survey provides insights into current and expected activity among these firms, covering aspects such as drilling, capital spending, and employment. The latest survey reflects the challenges faced by the energy sector, influenced by fluctuating oil and natural gas prices and broader economic conditions.
FAQ
What is the Tenth District?
The Tenth District refers to the region covered by the Federal Reserve Bank of Kansas City, encompassing Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and parts of western Missouri and northern New Mexico.
What does the Drilling and Business Activity Index represent?
The Drilling and Business Activity Index measures the level of drilling and business activities within the energy sector. A negative index indicates a decline in these activities.
Why are specific oil and natural gas prices important for drilling profitability?
Firms have set price thresholds for oil and natural gas to ensure drilling operations are profitable. Prices below these thresholds can lead to reduced drilling activities due to financial constraints.
What factors contribute to the decline in energy activity?
Fluctuations in oil and natural gas prices, along with broader economic conditions, significantly impact the profitability and viability of drilling operations, leading to reduced activity in the sector.
How does this survey impact the energy sector?
The survey provides valuable insights into the current state and future expectations of the energy sector, helping stakeholders make informed decisions regarding investments, operations, and policy considerations.
Key Features
| Feature | Details |
|---|---|
| Survey Period | Fourth Quarter of 2025 |
| Drilling and Business Activity Index | -39 |
| Revenues Index | -33 |
| Profits Index | -42 |
| Employment Index | -3 |
| Oil Price for Profitability | $61 per barrel |
| Natural Gas Price for Profitability | $3.80 per million Btu |
| Oil Price for Substantial Increase in Drilling | $75 per barrel |
| Natural Gas Price for Substantial Increase in Drilling | $4.89 per million Btu |
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