The Dallas Fed says that the latest data shows that energy companies in Texas have slashed 35,000 jobs since the start of 2016 through April. However, the Fed reports, the industry’s future is looking brighter.
In the midst of U.S. production deteriorating by half a million barrels a day, the Federal Reserve Bank of Dallas stated in its quarterly energy report, “Market participants seemed reassured by global inventory build-ups in 2016 that appear far more subdued than in 2015.”
The Dallas Fed also made note that the country’s convoy of active rigs has increased by over two dozen since a major bottom-out in May.
In addition to this, energy groups have reported to the Dallas Fed that $50 per barrel used to be way too low to keep oil production going, but that price can now sustain drilling activity after equipment and service costs dropped.
“Prices remain slightly below average breakeven levels for most geographic areas,” said the Dallas Fed.
A recent survey reported that oil companies in the Permian Basin in West Texas could maintain business on $51 per barrel, $53 per barrel in Eagle Ford in South Texas, and $56 per barrel in Oklahoma.
Article written by HEI contributor Briana Steptoe.