The Texas Petro Index declined in November and December after 23 consecutive months of growth. But the sharp drop in crude oil prices does not mean an end to the current cycle of growth of Texas' oil and gas industry.
“We surpassed all prior production records for crude oil in Texas in 2018 and actually shattered the 1972 record,” says Karr Ingham, petroleum economist for the Texas Alliance of Energy Producers.
Texas is on track to provide 45 percent of U.S. crude production by the end of this year. However, Ingham admits there is such a thing as too much oil.
“What worries me is the possibility that as was the case in 2014 this never ending supply growth from the United States is ultimately going to overwhelm global demand for that product and maybe set us up for another kinds of nasty event,” he says.
Looking forward, Ingham believes 2019 will be another banner year for the oil industry.
“If crude oil prices remain let's say even where they are right now, it will generally be a year of hiring and expansion in the oil and gas business, but probably not at the rates we saw three or four years ago when things were really hot.”
Among the data highlights for 2018:
*Posted WTI crude oil prices averaged $61.27 for the year, an increase of 29% compared to the 2017 annual average
*The statewide rig count finished the year at 531 on average for December, an increase of over 16% compared to the December 2017 monthly average rig count, but down slightly from 533 in October and November
*The number of drilling permits issued in Texas was up by 5.6% in 2018 compared to 2017, which in turn logged an increase of over 55%compared to the previous year
*Estimated crude oil production of 1.615 million barrels outpaced the 2017 annual total by nearly 28%; daily crude oil production surpassed 4.9 million barrels by year-end 2018
*Natural gas production continued to increase in 2018 to an estimated 8.6 trillion cubic feet, an increase of nearly 9% year-over-year.Associated gas production comprised roughly 38% of total production by year-end 2018
*Direct oil and gas employment reached an estimated 238,300 in December up from about 205,900 at year-end 2017, and 181,600 in September 2016