Job prospects in the oil and gas sector far below their peak levels even as crude oil markets start to show some level of stability, state oil economist says. File photo by Gary C. Caskey/UPI | License Photo
WICHITA FALLS, Texas, June 28 (UPI) -- A Texas oil economist said job prospects for those working in the energy sector are mediocre at best even as markets start to return to relative stability.
Crude oil prices have held at or near the $50 per barrel mark for the better part of June as markets start to show a reasonably adequate balance between supply and demand. A surplus of oil on the market, coupled with weak demand, sent crude oil prices tumbling from above $100 per barrel in 2014 to below $30 per barrel early this year.
For Texas, Karr Ingham, an economist who created a series of metrics to gauge the health of the state energy sector, says job losses are mounting in the oil and gas sector.
"The last time industry employment was this low was in late 2010, as the last expansion of upstream oil and gas activity in Texas was just beginning to take off," he said in an emailed statement.
The Federal Reserve Bank of Dallas said in a regular review of the regional economy the pressure from low oil prices was spilling over to other parts of the economy, with banks in southern U.S. states facing increasing risk.
While outperforming its peers elsewhere in the country, the Federal Reserve Bank said profitability is on the decline. The city of Houston, which hosts the headquarters of dozens of national and international energy companies, is facing prolonged headwinds following fits and starts over the last several quarters.
According to Inham's estimates, the number of people working in the exploration and production side of the industry in Texas is down more than 20 percent year-on-year. As of May, about 205,100 jobs were in exploration and production, compared with the peak 225,965 in October 2008.
In terms of production, Ingham, who operates through the Texas Alliance of Energy Producers, gas output in Texas is down 3.1 percent year-on-year. Crude oil production from Texas, the No. 1 producer in the country, is down 5.1 percent year-on-year.