May 19 (UPI) -- An improved market climate in the energy sector means Texas is well on the road to recovery with job gains up for the third straight month, a bank reported.
Lower crude oil prices last year left energy companies with less capital to invest in oil and gas exploration and led to economic and employment declines in Texas, the No. 1 oil producer in the United States.
Prices came under pressure from supply-side pressures in April and led to a drop below the $50 per barrel threshold, though support in May has come from a proposal from parties to an effort led by the Organization of Petroleum Exporting Countries to extend a production ceiling into early 2018.
For April, the Dallas bank said the spot price for West Texas Intermediate, the U.S. benchmark for the price of oil, was $51.06 per barrel, compared with the $49.33 average for March. WTI remains below the April average, however, trading at around $49.90 per barrel at 6:00 am EDT. The price for WTI on this date last year was $48.12 per barrel.
The bank's report said the slight improvement meant activity in the state's shale basins, the Permian shale reservoir in particular, was supporting job growth.
"Texas oil and gas extraction employment increased slightly to 92,500 jobs, and payrolls in support activities for mining rose to 119,200," its report read. "This is the third consecutive month of increases in total Texas oil and gas employment."
The Texas Railroad Commission, the state oil and gas regulator, said it issued 821 new permits to drill for oil or natural gas in April, up about 30 percent last year. The number of wells completed – a metric that loosely equates to the prospect for commercial operations – was down considerably from last year, however. In the past, the economists at the Federal Reserve Bank of Dallas nevertheless said the rising number of drilled, but uncompleted, wells in the Permian basin could indicate the reservoir could respond with a larger increase in production when market conditions are more favorable.
From March, total production from the Permian basin increased 61,200 barrels per day to 2.35 million barrels per day. Output from the Eagle Ford shale in Texas moved higher for the second straight month to 1.2 million bpd, more than the entire state of North Dakota, the No. 2 oil producer in the country.