Oil prices rose 18 percent last month, the biggest gain for any January on record.
Rising crude prices have long been cited as a necessary ingredient for any rebound in Houma-Thibodaux’s offshore-oil-based economy.
The area has lost roughly 16,000 jobs -- nearly one of every five -- since mid-2014 as low crude prices sparked layoffs and work slowdowns throughout the oil industry. The U.S. industry has rebounded along with oil prices, but job growth has been limited mostly to inland shale fields, where drilling is less costly than the deep waters of the Gulf of Mexico.
Economists and analysts say that is beginning to change as companies drive down the break-even cost of Gulf drilling and oil prices have risen. The number of oil and gas and maritime jobs in Terrebonne and Lafourche parishes has remained relatively stable for nearly a year, though the local economy overall lost 1,000 jobs in 2018, according to state figures released last week.
Louisiana economist Loren Scott told local business people last fall that he expects the area to gain 700 jobs this year and 2,100 in 2020 as oil prices rise and offshore drilling picks up. But that forecast depends largely on oil prices rising steadily.
“After much bloodletting, the corner appears to have been turned,” his economic forecast for 2019-20 says. “Fabricators and shipbuilders are making a reasonably successful shift to non-extraction-related-customers. An oil price of $80 a barrel by 2020 is expected to start a serious revival in the Gulf by 2020.”
West Texas Intermediate crude, the U.S. benchmark, closed Friday at $55.26 a barrel, up 2.9 percent for the week. Brent, the global standard, closed Friday at $62.75 a barrel, up 1.8 percent for the week.
Analysts cited several reasons for January’s rise, among them:
- Strong U.S. job gains that raised expectations for greater fuel demand.
- U.S. sanctions on oil exports in Venezuela, a country wracked by economic and political turmoil.
- OPEC has cut production in an effort to boost prices.
- Reduced drilling in U.S. shale fields, which some analysts attributed to a delayed reaction from a decline in oil prices late last year.
Despite January’s gains, crude prices are down roughly 30 percent from October’s 52-week high.
The Gulf rig count -- a barometer for Houma-Thibodaux’s economy -- stood at 19 Friday, down one for the week but up three compared to a year ago, according figures from the Houston-based oilfield-services company Baker-Hughes. But it remains down 66 percent from 56 rigs in August 2014, when the offshore oil bust began.
-- Executive Editor Keith Magill can be reached at 857-2201 or email@example.com. Follow him on Twitter @CourierEditor.
Posted on Tue, February 5, 2019
by By Keith Magill Daily Comet / Houma Today Executive Editor