US oil and gas production increased in the third quarter of 2026, the Federal Reserve Bank of Dallas reported in its latest quarterly energy survey, even as producers across the Eleventh District flagged mounting uncertainty over where prices are heading.

The Dallas Fed energy survey, a quarterly poll of oil and gas firms operating in Texas, southern New Mexico and northern Louisiana, remains one of the most closely watched readings on upstream activity in the Permian basin, Eagle Ford and Haynesville. Its production indices track the share of firms reporting rising versus falling output, making the Q3 2026 result a directional verdict rather than an official volume figure.

For operators, the message is double-edged. Volumes are up — consistent with the continued efficiency gains that have characterized shale basins through 2025 and 2026 — but the forward view has darkened. Respondents pointed to price uncertainty as the dominant planning risk, echoing the persistent gap between headline output growth and the cash-flow discipline that boards have imposed since the 2020 downturn.

What does the survey actually measure?

The Dallas Fed polls exploration and production companies, oilfield services firms and support businesses each quarter. Its indices aggregate answers on:

• production volumes in oil and in natural gas;
• business activity, employment and capital spending;
• expectations for prices and activity six months out.

The production component captures the breadth of change — how many firms grew versus shrank — rather than barrels per day. The Q3 2026 reading puts more firms in the growth column, a signal that well completions and takeaway infrastructure in the Permian continued to support volume gains even where rigs stood idle elsewhere.

Why does price uncertainty dominate if output is rising?

Because the two move on different clocks. Production today reflects drilling and completion decisions made six to eighteen months ago, when operators laid in DUC inventories and drilled but uncompleted wells across the Midland and Delaware basins. Spending decisions today set the trajectory for late 2027 and beyond.

Survey commentary from producers — the Dallas Fed publishes anonymized executive remarks alongside the indices — has repeatedly emphasized hedging limitations, service cost pressure and the difficulty of budgeting when the oil price band is wide. That caution is the mechanism by which price uncertainty translates, with a lag, into flat rig counts and restrained completion crews.

For the downstream side of the ledger, rising domestic gas volumes feed Gulf Coast LNG terminals and petrochemical crackers, while crude gains support refinery runs at a moment when product margins remain the swing variable for complex refiners on the Houston ship channel.

The watch item

The next Dallas Fed survey release, covering fourth-quarter activity, lands in early January 2027. Watch the capital expenditure and six-month outlook indices rather than the production print: those forward components will show whether the Q3 uncertainty respondents described hardens into actual spending cuts for 2027 programs — or whether firms treat the price fog as noise and hold activity flat into the new year.