Permian Basin Economic Indicators
In 2018, Permian Basin employment grew 7.5 percent, well above Texas’ job growth of 2.4 percent. However, area job growth fell in the last quarter, and the unemployment rate inched up to 2.5 percent. Oil production remains strong, but the rig count was flat. Housing measures continue to show strength.
Employment Expands in December
Permian Basin employment grew at annualized rate of 9.5 percent in December (Chart 1), up from the 8.3 percent decline in November. Payrolls dipped in the fourth quarter after posting a solid gain of 10.2 percent in the first nine months of 2018.
Despite the December job gains, the jobless rate inched up to 2.5 percent. The rate remained well below the Texas average of 3.7 percent.
Midland Outpaces Odessa in Job Growth
In 2018, employment expanded 9.9 percent in Midland, compared with 4.3 percent in Odessa (Chart 2). This marked the second consecutive year in which Midland’s employment gains outpaced Odessa’s. Both metros outpaced the state’s 2.4 percent growth. Midland created approximately 9,700 jobs last year, compared with 3, 200 in Odessa.
Oil Production Climbs; Rig Count Still Subdued
Permian Basin oil production is estimated to have reached 3.8 million barrels per day (b/d) in December, up from November’s 3.76 million b/d (Chart 3). Meanwhile, the Permian Basin rig count was little changed at 484 in January.
West Texas Intermediate Oil Price Drops
After peaking in October near $76, the West Texas Intermediate (WTI) oil price has fallen. WTI this month has averaged $50.84 through Jan. 24 (Chart 4). According to the latest Dallas Fed Energy Survey, respondents expect prices to finish 2019 near $59.97 per barrel.
Drilled but Uncompleted Wells Rise Steadily
The Permian Basin had over 4,000 drilled but uncompleted wells (DUCs) in December, up 5.3 percent from November (Chart 5). DUCs outside of the Permian continued to increase at a much slower pace. The Permian now accounts for just under half of all DUCs in the U.S.
Existing-home sales reached new highs in 2018. Sales in the Permian Basin totaled 4,521, up more than 10 percent from 4,100 in 2017 (Chart 6). The average price also continued to climb, rising 6.3 percent over the year to $282,913.
With robust sales, inventories remain tight in the Permian region. In December, inventories stood at 1.6 months in Midland and 1.3 months in Odessa.
NOTES: Data are for the Midland–Odessa metropolitan statistical area (Martin, Midland and Ector counties), except for energy data, which cover the 55 counties in West Texas and southern New Mexico that make up the Permian Basin region. Data may not match previously published numbers due to revisions.
About Permian Basin Economic Indicators
Questions can be addressed to Marycruz De Leon at Marycruz.DeLeon@dal.frb.org. Permian Basin Economic Indicators is released on the third Wednesday of every month.