US oil sector growth slowed at end of 2018

- Xinhua, HOUSTON

Jan 21, 2019-

The US oil sector growth cooled at the end of 2018, and lower oil prices eroded expectations for capital spending in 2019, a report released by Federal

Reserve Bank of Dallas said on Friday.

According to the Energy Indicators, initial estimates of Texas mining employment showed growth moderating over the three months ending in November. Support activities for mining-mostly oilfield services companies and the more cyclical part of the industry slowed to an annual growth rate of 9.4 percent. Extraction-mostly exploration and production firms fell 2.1 percent. The slower growth was likely driven by limited pipeline capacity and flattening drilling and completion activity.

Outside of Texas, mining job growth was much more muted, said the report. Mining support activities growth was essentially flat at an annual rate of 0.1 percent for the three months ending in November 2018.

Oil prices fell further in December 2018 as international benchmark Brent crude slipped to 57 US dollars a barrel. Strong supply growth in the United States, rising liquids inventories, waivers from United States sanctions for importers of Iranian crude oil, and uncertainty about the demand growth picture weighed on prices even after OPEC, Russia and Canada announced their intentions to cut production in 2019, the report concluded.

In the United States, limited takeaway capacity and surging production have kept crude oil prices relatively lower to global benchmarks. This condition is expected to ease over 2019 as new pipelines are completed and come into service, said the monthly released report.

Published: 21-01-2019 10:51

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