July 24 (UPI) — Strong job growth in Texas was apparent, though some energy sector indicators are still presenting headwinds, the Federal Reserve Bank of Dallas said.
A report from the Federal Reserve Bank of Dallas found job growth in the state was 3.6 percent and the overall forecast for the year was 2.8 percent, an upward revision from 2.6 expected in its last forecast.
“Strong job growth in June and a rebound in the leading index pushed the job forecast to its highest level this year,” Keith R. Phillips, the fed’s assistant vice president, said in a statement. “Growth in the second quarter was 2.8 percent, the fastest we have seen since the end of 2014.”
The report found indicators from the energy sector were acting negatively on overall prospects, though new exploration and production increased last month after two straight months of decline. On Friday, however, drilling services contractor Baker Hughes reported 463 active oil and gas rigs in Texas, a decline of three from the previous week.
In its latest report, the U.S. Energy Information Administration reported that productivity in the Permian shale basin in Texas was on pace to decline for the 10th month in a row because operators are drilling wells, but not completing them, a process used to prep it for production. The report said oil flows only when a well is completed. When it’s not, output per rig declines.
Still, the Permian region is expected to represent about 30 percent of total U.S. crude oil production next year. Total U.S. crude oil production in 2018 should be about 9.9 million barrels per day, but that’s a downward revision of about 100,000 barrels per day from its last estimate from the EIA.
Last week, the Railroad Commission of Texas, the state’s energy regulator, reported preliminary total production for May, the last full month for which data were reported, was 76.4 million barrels of oil, down from the 84.5 million reported in May 2016. The final figure for May 2016 was revised upward by around 10 million barrels from the preliminary volume.