Exploration activity for petroleum liquids remains very active. The price for West Texas intermediate crude oil has drifted down over the last year to near $85 per barrel, still an attractive price for drillers. The oil rig count for Texas has stabilized at about 700 rigs since last May. Natural gas prices have recently climbed to about $3.60 per MMBTU, still somewhat weak. The Texas gas rig count has declined steadily over the last year to 158 rigs as of late November, about half of what it was last January. Midstream and downstream operations for natural gas are very active, even as the gas drilling boom subsides. There is growing optimism that the controversial Keystone XL crude oil pipeline project may re-emerge from the dead, to eventually bring Alberta crude oil to Texas refineries.
Driven by a robust energy sector, the Houston economy continues to add jobs at a rapid pace, making it the fastest growing major metropolitan area in the country. As of October, payroll employment in the Houston metro area was up 3.7 percent over the past year, well above the 1.5 percent U.S. average growth rate. An example of the Houston’s broadening economic base is the addition of two cruise lines at the Port of Houston’s Bayport Cruise Terminal. Strong job growth is driving population growth for Houston. According to the Census Bureau, the City of Houston added 45,716 residents between April 2010 and July 2011, nearly three-thousand new residents per month.
Increasing construction activity is also broadening Houston’s economy. House prices have been firming through mid-year 2012, and are expected to continue to gain as home sales increase. According to the FHFA house price index, Houston house prices were up 4.1 percent in the second quarter of 2012 from a year earlier. Part of the recent gain in Houston house prices (and in most other areas) comes from a declining percentage of distressed homes in the mix, but beyond that, the market is firming.
Click here for a PDF version of the complete 2012Q4 Houston Regional Economic Update: Houston 2012Q4.