Region’s energy sector starting to contract, according to Fed survey

The region’s energy sector has already started to contract because of falling oil prices, according a new survey by the Kansas City Federal Reserve Bank.

More than half of the surveyed oil and gas firms plan to cut spending, and a quarter anticipate significant layoffs over the next six months, according to the survey.

The survey covers Kansas, Oklahoma, Colorado, Wyoming, Nebraska, the western third of Missouri and the northern half of New Mexico.

According to bank economist Chad Wilkerson, the firms that were surveyed said that to be profitable they needed an average West Texas Intermediate crude oil price of $79 per barrel. The WTI price now sits below $48 per barrel and most companies didn’t see it rising back to profitable levels before the end of the 2015.