Dec 18, 2019

The U.S. shale slowdown hits Texas jobs

Photo: Spencer Platt/Getty Images

A new Dallas Fed report provides the latest evidence of how the slowdown in U.S. oil production growth is rippling through the shale patch.

Driving the news: The latest energy data shows that job losses in Texas — the heart of the U.S. oil boom — are "deeper than initially estimated."

  • It shows that the state's "mining" sector — largely a proxy for the industry —  lost 8,100 jobs from December of 2018 to October of this year, a deeper decline than seen in prior Labor Department data.

Why it matters: It signals the effect of U.S. production growth cooling off compared to 2018's dramatic rise."

  • Support activities for mining (mostly oilfield services, the more cyclical component of oil and gas mining) has been following the rig count down in 2019," the Dallas Fed notes.

What they're saying: The latest episode of the Platts Capitol Crude podcast explores the industry's belt-tightening.

  • Antoine Halff, founder of the data analytics firm Kayrros, says that until relatively recently, “Shale was more like a tech startup in terms of the model. There was a lot of interest in the growth potential.” But now "the model has changed," he said.
  • “As recently as a couple of years ago, investors were rewarding production growth at any cost. Now production growth is not really a goal in itself, and budget discipline, profitability is much more important.”

The big picture: A weekend Wall Street Journal feature on the shale slowdown looks at the effects in several oil-producing areas of the country. The reporting shows "emptier hotels, choosier employers and less overtime for workers."

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What Middle East crisis? Why oil prices aren't rising

Data: EIA; Chart: Axios Visuals

Despite rising unrest in the Middle East — including the death of an Iranian commander — America’s average gasoline prices have remained under $3 a gallon.

Why it matters: Practically speaking, it’s great for drivers’ pocketbooks — and President Trump’s re-election campaign. It also shows the remarkable cushion created by the United States' booming oil production, which has doubled over the last decade.

Go deeperArrowJan 8, 2020

How a Democratic president might be able to take action on fracking

Photo: Joe Amon/The Denver Post via Getty Images

One of the higher-profile energy topics in the primary fight has been a push by several Democrats to ban or restrict fracking, although it didn't surface at the primary debates Thursday night.

Driving the news: A new note from the data analytics firm Kayrros sizes up what a president might actually be able to do — thwart fracking on federal lands. They account for a relatively small but hardly trivial share of U.S. oil and gas production.

Go deeperArrowDec 20, 2019

The decade's biggest unexpected boom

Shale dominated the 2010s, even more than the iPhone or cloud computing. That's the claim made by blogger and investment adviser Josh Brown, who sees the U.S. shale boom causing a collapse in energy prices that had enormous economic and geopolitical consequences.

By the numbers: The U.S. currently produces roughly 12.7 million barrels of oil per day. That's an all-time high, and is more than double the 6.1 million expected 1o years ago.

Go deeperArrowJan 2, 2020