HOUSTON – The latest available data shows Texas energy companies cut 35,000 jobs this year through April, but the industry’s outlook is improving, the Dallas Fed says.
“Market participants seemed reassured by global inventory build-ups in 2016 that appear far more subdued than in 2015,” as U.S. production declines by half a million barrels a day, the Federal Reserve Bank of Dallas said in its quarterly energy report.
The Dallas Fed pointed out the nation’s fleet of active drilling rigs has grown by more than two dozen since bottoming out in May.
And energy companies have told the Dallas Fed $50 a barrel oil, which was once too low to keep oil producers alive, can now support drilling activity after equipment and service costs fell.
“Prices remain slightly below average breakeven levels for most geographic areas,” the Dallas Fed said.
In a recent survey, oil companies said they could get by on $51 a barrel oil in the Permian Basin in West Texas, $53 oil in the Eagle Ford in South Texas, and $56 oil in Oklahoma.