Texas oil jobs jump as OPEC cuts, record oil demand boosted prices

Jobs in the Texas oil patch jumped in August after dipping earlier in the summer as the state’s oil and gas industry maintains its steady climb back to pre-pandemic employment levels.

Oil and gas extraction and services jobs in Texas jumped by 1,293 positions in August to more than 208,000. The increase, which came as oil prices began rising back above $80 a barrel after months price declines, reversed a July dip that saw employment in the sector fall to 205,753 from 206,722 the month before. The July decline ended a monthly growth streak that began in early 2021, according to figures compiled by the Texas Alliance of Energy Producers.  

The oil market has been tightening again in recent months as global demand reached record highs at the same time members of the Organization of the Petroleum Exporting Countries extended production cuts. The price of West Texas Intermediate hovered at nearly $94 a barrel in Wednesday afternoon trading, and analysts have been eyeing $100-a-barrel prices in the not-too-distant future. 

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“These jobs were about to be in peril, or at least the continued growth would have been in peril,” said Karr Ingham, a petroleum economist for the energy producers’ alliance. “There was a peak a’ coming, and this price increase turned around the rig count and may have saved the day there.”

Still, following their latest quarterly survey of the energy industry, economists with the Federal Reserve Bank of Dallas said Wednesday that steady job growth could be slowing now that oil companies have caught up on hiring as labor shortages appear to be easing. 

“I think employment was in many ways catching up to the rig count,” Kunal Patel, senior business economist with the Dallas Fed, said Wednesday during a media briefing. “And that’s why we’re seeing employment growth slow to a crawl.”

The majority of executives surveyed this month by the Dallas Fed said they expect U.S. rig counts six months from now to stay roughly where they are, suggesting job growth would be minimal in the months ahead, Patel said. 

The U.S. rig count fell last week by double digits to 630 rigs compared with 641 the week before. The rig count was down 18 percent from the same week last year, when the oil prices were still riding high on the oil shortages created by the Ukraine war. 

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The fact that oil field jobs have continued to grow in Texas despite weakening indicators shows oil companies plan to stay busy in the oil patch, said Jesse Thompson, senior business economist at the Dallas Fed’s Houston branch. “They wouldn’t be hiring them if they didn’t think they could deploy them.”

Still, he said, “there’s limited scope for breakout growth.”

Other notable takeaways from the Dallas Fed’s latest survey include: 

The majority of executives surveyed said they expect the energy transition away from fossil fuels to drive up the price of oil over the next five years. And they believe oil demand will be higher in 2050 than it is today, despite recent projections from the International Energy Agency, Wood Mackenzie and other firms, which expect oil demand to peak within the next decade.

The majority (60%) of executives expect drilling and production costs per well will be higher in 2024 than this year, while 18% expect costs to be lower. 21% expect no change.


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