(The Center Square) - Energy activity in the Federal Reserve Bank of Kansas City's region accelerated during the second quarter of 2022, according to the bank's most recent energy survey.
The survey covers the 10th Federal Reserve Bank District, which includes Colorado, Nebraska, Oklahoma, Kansas, Wyoming, and parts of New Mexico and Missouri.
"District drilling and business activity grew faster in Q2, with additional growth expected in the next six months," Chad Wilkerson, an executive from the Federal Reserve Bank of Oklahoma, said in a statement. "Commodity prices have increased considerably, and firms reported more drilling and business activity and higher revenues."
Drilling and business activity increased from 27 out of 100 points in the first quarter to 57 points in the second quarter, which is the highest total recorded by the survey since December 2016, the bank said. The quarterly indexes for wages and benefits, industry employment, and revenues also reached record highs during the second quarter.
Wilkerson added that supply chain issues, worker shortages, and inflation "continued to impact production growth and profitability."
Energy prices have been a primary concern for consumers in the region for nearly a year.
According to the latest inflation data from the U.S. Bureau of Labor Statistics, energy prices have increased by more than 24 percent in the Denver area over the last 12 months primarily due to higher gasoline prices.
Despite the rising gas prices, energy firms reported strong expectations for future business and drilling activity. The index for these future activities increased from 42 points to 50, according to the bank's survey.
But energy firms also expect to see slightly modest growth for profits, capital spending, and employment in future quarters as the price of oil and natural gas remain elevated.
When firms were asked what prices for oil and natural gas were needed for their operations to be profitable, the average oil price was $65 per barrel while the average natural gas price was $4.64 per million British thermal units (BTU).
The price of a barrel of crude oil was down by more than 2.4 percent on Monday to $102.2 per barrel while the price of natural gas was up by more than 7 percent to $6.47 per million BTUs, according to data from OilPrice.com.