US oil and natural gas production increased in the third quarter of 2026, according to the Dallas Federal Reserve's latest energy survey, even as producers across the Eleventh District flag growing uncertainty over where prices are heading.

The Dallas Fed's quarterly survey, which polls oil and gas companies operating in Texas, southern New Mexico and northern Louisiana, recorded a rise in production for the quarter. That expansion comes against a backdrop of wavering price expectations, with respondents describing the forward outlook as the dominant risk to activity levels in coming months.

What does the survey show?

The headline finding is straightforward: output moved higher in Q3 2026. The Dallas Fed survey tracks both oil and gas production indices for the district, which spans the Permian basin, the Eagle Ford, the Haynesville and the Barnett — basins that together account for the bulk of US shale supply.

Respondents credited the production increase to continued efficiency in well completions and sustained development drilling on already-sanctioned acreage, the survey's respondents indicated in their commentary.

At the same time, the survey's forward-looking measures show producers tempering their plans. Price uncertainty — the degree to which executives doubt where WTI and Henry Hub will trade over the next two quarters — weighed on expectations for future activity, the Dallas Fed said.

Why does price uncertainty dominate?

Producers told the survey that unpredictable price swings make it harder to commit capital to new drilling programs, tie drilling and completion schedules to hedging programs, and plan completions beyond current DUC inventories.

The tension the survey captures is familiar to the sector: physical output is still rising, but the confidence needed to sustain that trajectory is eroding. Several respondents pointed to the gap between current production strength and a more cautious corporate outlook for 2027 spending, the survey commentary showed.

For service companies in the district, that caution translates directly into utilization. When operators defer completions or slow rig deployments, pressure pumping and drilling contractors feel it first — typically within one to two quarters.

What should the market watch next?

The watch items from this survey cycle:

• The next Dallas Fed release, which will show whether the Q3 production gain held into Q4 2026 or whether price-driven caution began to bite.
• The direction of WTI and Henry Hub futures curves, which respondents identified as the swing variable for 2027 budgets.
• Any revision to US upstream capital spending plans for 2027, since the survey's respondents signaled that budgets remain hostage to price visibility.

The Dallas Fed survey is published quarterly and is based on responses from oil and gas firms across the Eleventh District. Its production and activity indices are closely watched as a real-time gauge of the shale sector between EIA monthly data releases.

The key question for the fourth quarter: whether operational momentum — visible in the Q3 production increase — outlasts the pricing anxiety that respondents say now clouds their planning horizon.