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How Higher Oil Prices Are Hurting Demand

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Friday July 13, 2018

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Automation hits oil and gas industry

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- Automation and robotics are eliminating jobs in the oil and gas sector. Oil drillers are producing more oil than ever before, but they no longer need legions of workers to do so.
- Output has climbed to 10.9 mb/d recently, but employment is 21 percent lower than it was in 2014, according to the Wall Street Journal.
- Despite the oil boom and the drilling frenzy, the jobs are not coming back in the same way.
- Devon Energy (NYSE: DVN), for instance, has trimmed its workforce to 3,100, down from 5,500 in late 2014. Drilling and construction costs are down by 40 percent over that timeframe, while initial production rates are up by some 450 percent.
- Trucking is the one sector that is sorely hurting from a shortage of workers. Truckers can still receive six-digit salaries.
- Ironically, one oft-cited solution to the pipeline bottleneck in the Permian is trucking oil to the Gulf Coast, but the nationwide trucking shortage makes that unlikely.

2. Lack of pipeline capacity or too many pipelines?

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- Matching midstream capacity…

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