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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."