Texas, the No. 1 oil producer in the United States, reported crude oil production edged slightly lower than the previous month based on preliminary data.
Strains continued for the nation's top oil producer even after a survey from the U.S. Geological Survey found the Wolfcamp shale reserve within the Permian basin in Texas was among the largest oil and gas deposits ever assessed in the country.
Production figures for September showed a slight decline from the previous month at 2.38 million barrels per day. The Texas Railroad Commission, which regulates the energy sector, reported preliminary figures for October at 2.37 million barrels per day. September production was 1.5 percent lower than last year and October's was lower year-on-year by the same.
"The commission reports that in the last 12 months, total Texas reported production was 987 million barrels of crude oil and 8.1 trillion cubic feet of total gas," it said in its latest month report. Previous month reports showed the 12-month moving level was above the 1 billion barrel mark.
Rival shale states like North Dakota have shown some signs of a rebound in recovery as oil prices move back above the $50 mark following a November decision from the Organization of Petroleum Exporting Countries to cut production starting next month. Recovery for Texas, however, has been slow. Houston hosts the headquarters of several energy companies that were forced to cut payrolls early this year, and a division of BP this month moved out of Houston to Denver.
Texas data could show a rebound in production for the last two months of 2017 as oil prices ended October at around $45 per barrel, compared with around $52 per barrel early Thursday. Federal Reserve Bank of Dallas economist Keith Phillips said recently that, toward the end of the year, the weakness from early 2016 has given way to a sense of stability in the energy and manufacturing sectors.
Colorado's economy showing improvement
Denver (UPI) Dec 21, 2016 –
Colorado's economy is recovering along with the energy sector, though trajectory depends on U.S. rate policies next year, the state budget office said.
"Colorado's economy has picked up in recent months," Gov. John Hickenlooper said in a statement. "Our state's economy has demonstrated resilience during the downturn in the energy sector, and we are cautiously optimistic about the future."
Oil from Colorado accounts for about one out of every 50 barrels produced in the United States. Spending in the oil and gas sector declined and put some pressure on tax revenue growth early this year, though Hickenlooper said the deep contraction that started last year may have bottomed out.
The Colorado Office of State Planning and Budget said it expected revenue in the state's general fund to increase 4.4 percent in the fiscal year ending in 2017 and 5.1 percent for the fiscal year ending in 2018. The state, however, still expects a shortfall of $52.4 million, which the planning budget said it would work to close in budget requests in January.
From late 2014 to early 2016, the state's budget office said gross domestic product for Colorado's industrial sector dropped 24 percent and most of that came from the oil and gas sector. The rest of the state economy grew by 7.3 percent.
The OSPB said stability that started to emerge in mid 2016 meant the downturn for the oil and gas industry was slowing. The industry for Colorado has a small employment base, but accounts for large expenditures elsewhere and has some of the highest wages in the state.
"The large drop in spending and income in the state from the downturn in the oil and gas industry is no longer weighing on growth," the OSPB's report read. "An increase in new business formation, the source of most net new jobs, is also contributing to Colorado's improved economic growth."
British energy company BP said last week it was relocating the headquarters for its Lower 48 U.S. states division from Houston to Denver. The Downtown Denver Partnership development group said the move by BP is a testament to the city's strength. Denver, it said, boasts the seventh-most educated workforce in the country when measured against other metropolitan areas.
The OSPB's report expressed concern about the slow pace of recovery in the broader national economy and said the hawkish rate policy by the U.S. Federal Reserve could erase much of the momentum.
"Previous monetary tightening was followed by deteriorating financial conditions and a strong rise in the value of the U.S. dollar, which weighed on industrial production and global growth during 2015 and into the beginning of 2016," it said.
