More oil produced with fewer workers

U.S. oil fields are gushing again as crude prices rise, but the oil industry’s diminished workforce isn’t expected to return to its former size anytime soon.

The nation’s oil production surged to a 46-year record in October, rising 1.8 percent to 9.64 million barrels a day, just higher than it was in April 2015, according to the Energy Department. That’s up about 15 percent from the summer of 2016, when output fell to its lowest point in more than two years.

But in Texas, the state that pumps the most crude oil, drillers hit that milestone with a workforce roughly a third of the size of the one it had when crude prices hovered above $100 a barrel in 2014.

“We are supplying the needs of the market with way fewer jobs,” said Karr Ingham, an Amarillobased economist who studies the

Texas oil industry.

Morgan Stanley said shale drillers in Texas and other oil-rich states pumped at the fastest rate in nearly three years that month. The number of rigs drilling for oil in October was 737, less than half the number in October 2014, according to Baker Hughes.

Texas oil companies cut one in three oil field jobs after crude prices collapsed. But those producers and service companies have replaced only 32,000 jobs of the 102,000 they eliminated from early 2015 to late 2016, bringing the size of the state’s oil and gas workforce to about 220,000, according to the Texas Alliance of Energy Producers.

Yet Texas oil production has climbed almost 20 percent since December 2016 to 3.7 million barrels a day. The Energy Department expects U.S. oil production to reach an all-time record next year.

But unless oil prices surge to at least $80 a barrel, oil producers have no reason to hire back all the workers they laid off, Ingham said.

“What would it take to get us back to 300,000 jobs? A sea change in the global demand picture,” Ingham said. “Is there any reason to expect that? I don’t think so.”

Still, higher oil prices could stimulate job growth in Houston’s oil-centric economy. Estimates vary, but local economists believe the city could add between 65,000 and 75,000 jobs this year if U.S. crude prices hold around $60 a barrel.

U.S. oil prices dipped 5 cents on Tuesday to settle at $60.37 a barrel in New York.