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The oil and gas industry of Texas continued to recover in April, with strong oil production growth last month, the Federal Reserve Bank of Dallas said in its Energy Indicators monthly release.
The Permian Basin continued to be the driver of the U.S. rig count growth. Rig counts in the Permian increased from 310 in March to 337 in April, while rig counts in the Eagle Ford rose from 80 in March to 89 in April, the Dallas Fed said.
In job figures for a month lagging production figures, total Texas oil and gas employment rose in March by 3,500 jobs to around 211,700 jobs, with oil and gas extraction employment up slightly to 92,500 jobs, and payrolls in support activities for mining rising to 119,200. March was the third consecutive month of increases in total Texas oil and gas employment, the Dallas Fed said.
As early as in September last year, Fed economist Pia Orrenius said that encouraging employment growth in Texas suggests that “the worst of the energy crisis may be over”.
Earlier this month, the Dallas Fed said in its Texas Economic Update that positive job growth and rising rig counts indicate an ongoing energy sector recovery.
“The energy, manufacturing and construction sectors saw strong job gains in the first quarter as activity in the oil and gas sector improved, oil prices stabilized and the effect of a strong dollar on exports moderated,” the Dallas Fed said.
Related: Oil Prices Rise As Most OPEC Members Back Deal Extension
Since the fourth quarter of 2016, the energy sector has made “significant jobs gains”, following the loss of around one-third of its employment from the peak in the fourth quarter of 2014, the bank noted.
The key downside risks to the Texas economy continue to be possible sharp declines in oil prices, continued US dollar strength, and uncertainties over U.S. trade and tax policy, the Dallas Fed reckons.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.