Dallas Fed: Texas oil firms say oil demand has peaked

The Dallas Fed covers Texas, northern Louisiana and southern New Mexico.

The context: Survey respondents said the economic paralysis brought about by the spread of Covid-19 was the major factor, with uncertainty over who will win this year’s presidential election further discouraging investment. One respondent told the Fed that “I am significantly more discouraged than in previous quarters due to the demonstrated lack of real concern and the lack of effective leadership by this president, his advisers and the Senate.”

Others voiced concern about what would happen if Biden and Democrats fared well in the election: “A Biden administration would absolutely kill our industry,” one respondent said, according to the survey results.

Others worried about the large-scale bankruptcies sweeping across the industry and what it would mean for the larger economy. “We believe strongly that banks and operators will have to face reality, which will lead to widespread bankruptcies and asset sales. Banks will likely recover less than 35 cents of each $1 loaned,” a third respondent said.

What’s next: OPEC members will hold their annual meeting at the end of November.