Permian Basin Economic Indicators
Oil production in the Permian Basin continues to reach new highs. However, the rig count and the number of drilled but uncompleted wells are contracting in the region. As activity in the oil and gas sector has decelerated, year-to-date job growth and home-price appreciation have slowed.
Employment Growth Moderates
Year to date through September, total employment inched up an annualized 0.2 percent, much lower than the double-digit growth seen during the same period last year (Chart 1). Sluggish growth was driven by mining, logging and construction—the largest sector in the Permian—which contracted an annualized 3.2 percent.
In September, the unemployment rate remained unchanged from August at 2.3 percent. The Permian Basin jobless rate remained well below the Texas rate of 3.4 percent.
Midland Wages Still on the Rise
While the three-month average for private sector hourly wages in Midland continues to climb, wages in Odessa have dipped (Chart 2). The average in Midland stood at $29.83 in August, up 4.8 percent from a year ago. The average in Odessa fell 3.0 percent from the prior year to $27.55. In August, both the Midland and Odessa averages were above the Texas average of $26.24.
Oil Prices Pull Back
The price of West Texas Intermediate (WTI) crude oil edged up in September after a production outage in Saudi Arabia affected global supplies, but prices have since retreated. The October month-to-date WTI average fell to $52.99 from nearly $57 in September (Chart 3).
Rig Count Falls, Oil Production Climbs
The Permian Basin rig count has been trending down since November 2018, falling by 79 rigs to 414 in September (Chart 4). Meanwhile, production continues to climb, reaching 4.47 million barrels per day in September.
Drilled but Uncompleted Wells Contract
The number of drilled but uncompleted wells (DUCs) in the Permian fell for the second consecutive month (Chart 5). In September, the number of DUCs stood at 3,668, down from 3,717 in August.
Home prices in the Permian continue to rise as inventories remain tight. On a year-over-year basis, prices were up 9.3 percent in Midland and 10.9 percent in Odessa in the second quarter, the most recent data available (Chart 6). While home prices continue to increase, the rate of appreciation has slowed.
NOTES: Employment data are for the Midland–Odessa metropolitan statistical area (Martin, Midland and Ector counties), unless otherwise specified. Energy data include 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 León at email@example.com. Permian Basin Economic Indicators is released monthly.