Permian Basin Economic Indicators

Employment in the Texas Permian Basin rose slightly in the three months ending in August and the unemployment rate rose. Home sales decreased slightly, while the median price of homes sold was flat. Oil production increased despite a decline in the number of new wells drilled and the number of active rigs.

Energy

Natural gas prices fall in third quarter

Natural gas prices in the Permian Basin (Waha) and national benchmark natural gas prices (Henry Hub) fell in the third quarter (Chart 1). Henry Hub’s average price decreased from $18.51 per barrel of oil equivalent (BOE) to $17.59 in the third quarter, while Waha, the hub in West Texas close to the producing wells of the Permian Basin, decreased from $11.43 per BOE to $2.91 in the same period.

The price of West Texas Intermediate crude averaged $64.97 per barrel in the third quarter, down 2 percent from the second quarter. However, prices fell to a daily average of $63.53 in September following oversupply concerns after OPEC+ increased production quotas.

Oil production increases

Oil production in the Permian Basin rose to 6.7 million barrels per day in the third quarter despite a reduction in new wells and active rigs (Chart 2). The number of new wells drilled decreased 6.3 percent from the second quarter; the number of active rigs decreased 8.3 percent over the same period. The trend of increasing drilling productivity continued despite fewer wells and active rigs.

Labor market

Employment edges up in Midland–Odessa region

Total nonfarm employment in Midland-Odessa ticked up (Chart 3). From May to August, mining; logging and construction; professional and business services; information and other services; and leisure and hospitality contracted, while other sectors grew. Employment in education and health services notably grew 17.4 percent. Total U.S. nonfarm employment rose 0.2 percent, and Texas nonfarm employment increased 0.7 percent over the same period.

Year over year, employment in Midland–Odessa grew 1.9 percent in August. Employment increased in all sectors except for mining; logging and construction; information and other services; leisure and hospitality; and professional and business services.

Unemployment rates tick up

The unemployment rates in both Midland and Odessa were higher in August compared with May (Chart 4). Midland’s unemployment rate increased from 3.1 percent in May to 3.3 percent in August, while Odessa’s jobless rate increased from 3.7 percent to 3.9 percent in the same period. Meanwhile, Texas’ unemployment rate stayed the same at 4.1 percent over the same period.

Housing

Single-family housing permits decrease

Single-family housing permits in Midland decreased in July and August compared with the end of the second quarter (Chart 5). Single-family housing permits in Midland were down 19.9 percent in August compared with June and permits dropped 9.3 percent in Odessa. Texas single-family housing permits declined 2.9 percent over the same period.

Home sales decline while prices remain flat

Home sales in the Permian Basin were down 2.4 percent in September compared with June (Chart 6). However, home sales in the region were up 0.7 percent on a year-over-year basis. The median home sales price was little changed from June to September but was up 1.2 percent compared with September 2024. The median home sales price in the Permian Basin was $334,000 in September, in line with the state figure.