The Federal Reserve Bank of Dallas sees steady gains in oil production from the shale basins in the state. File photo by Lilac Mountain/Shutterstock/UPI
Nov. 17 (UPI) -- Shale oil production in Texas has increased steadily for more than a year and gains have spilled over into the broader economy, a federal reserve bank said.
The Federal Reserve Bank of Dallas said that "positive signs are starting to reappear for the Texas oil and gas sector" as crude oil prices held above $50 per barrel for much of the third quarter. The price for West Texas Intermediate, the U.S. benchmark for the price of oil, is up 25 percent since the start of July and trading near $56 per barrel early Friday.
Crude oil prices were supported by a decline in commercial crude oil inventories, compliance with an effort steered by the Organization of Petroleum Exporting Countries and recent geopolitical tensions in northern Iraq. A rally that spanned most of the quarter has been offset by gains in U.S. production and exports, however.
The reserve bank said oil production from the Permian shale basin increased by 2.4 percent from September to 2.57 million barrels per day, while output from the Eagle Ford shale gained about 0.7 percent to 1.22 million bpd.
"This marks the 13th consecutive monthly increase in Permian production," the bank's report stated. "Eagle Ford production has remained relatively flat, increasing only 40,600 bpd over the past 12 months."
For employment, the bank said expansions were evident in September, with jobs tied to the oil and gas sector increasing by nearly 2 percent to 222,000. Those jobs tied directly to oil and gas extraction, meanwhile, saw the first monthly increase since April.
Of all the U.S. jobs tied to oil and gas, more than half are in Texas.
Last week, Dallas Fed Assistant Economist Amy Jordan said the market is tightening up, however, and there might not be too much room left for further economic growth overall.
"And given Texas is highly dependent on trade with Mexico, uncertainty surrounding ongoing trade negotiations is another headwind," she said in a statement last week.
Adopting a more protectionist stance than his predecessors, U.S. President Donald Trump is working to overhaul the North American Free Trade Agreement. This week, the Canadian, Mexican and U.S. energy secretaries met in Houston to discuss the North American energy sector.
Vague on specifics, the ministers in a joint statement said the meeting focused on "individual and collective efforts to ensure regional energy security, and pursue thriving energy sectors that foster economic growth while reducing overall emissions."