From San Antonio Express-News/Houston Chronicle
Jobs in Texas’ oil and gas industry rose at the end of 2016 for the first time in more than two years, another sign that the long-awaited recovery in the state’s energy sector is gaining traction.
Texas added an estimated 3,000 oil and gas jobs in November and December, after shedding more than 100,000 during the industry downturn that began in mid-2014, said Karr Ingham, an economist who studies the state’s oil and gas sector.
“For the first time in three years,” Ingham said, “there’s optimism.”
The job gains are the latest indicator that the oil and gas industry is rebounding after an extended bust. Oil prices have doubled since hitting a low of $26 a barrel last February, settling in New York at $53.17 Friday. Drillers have returned about 140 rigs to operation in Texas oil and gas fields since May, when the rig count hit bottom. Companies are flocking to the productive and lucrative Permian Basin in West Texas, spending billions to acquire land and drilling rights.
But Ingham, in his analysis for the Texas Alliance of Energy Producers, cautioned that the industry shouldn’t expect to see a boom anytime soon. Despite recent gains, both the rig count and drilling permits are down about two-thirds from their peak in 2014, when prices were above $100 a barrel. The state, for example, issued more than 3,000 drilling permits in both September and October 2014; in December, the state issued just over 1,000.
Oil production still is down from a year ago. And it could take years for the state to recover the jobs lost in the bust.
“Essentially, all we’ve done is stop bleeding at this point,” Ingham said, “but at least we aren’t continuing to bleed.”
The outlook for the energy industry has improved since OPEC and other major producers, such as Russia, agreed to cut crude oil production by about 1.8 million barrels a day, pushing prices above $50 a barrel and restarting drilling activity,
Ingham said he expects conditions to improve this year, but only modestly. He expects prices to hover between $50 and $60, which will keep many oil companies struggling.
“Oil and gas services have really taken a beating, and everyone needs $60 per barrel of oil to make a difference,” said Ingham, who doesn’t expect prices to reach that level this year.
While oil continues to make a sluggish recovery, natural gas prices are on the rise, possibly indicating a shift in the focus of Texas’ production, Ingham added. After a year of the lowest natural gas prices in nearly 20 years, those prices are expected to rise in 2017 to their highest level in three years.
