We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » CBRE Research | Houston: We have an energy tipping point
Press releases are provided by companies as is and have not been edited or checked for accuracy. Any queries should be directed to the company issuing the release.

Upload your press release

CBRE Research | Houston: We have an energy tipping point

January 8, 2018
No Comments

CBRE has released the latest on the Houston energy market, which is available for download at cbre.com/research. Below is a summary of key highlights.
- Gradually improving crude oil prices since early 2016 have approached what now appears to be, in the final months of 2017, an industry tipping point: $60 a barrel for West Texas Intermediate (WTI) crude.
- The long, and seemingly unending, slog back to this price level broke as December drew to a close at a level that had not previously broken since mid-2015 during an 18-month period of decline below $30 prices.
- This is encouraging news for Houston. In one example, the Federal Reserve Bank of Dallas recently reported a near 40% rise in the energy firm business activity index in the Oil Patch district. The bulk of this activity is concentrated in the exploration and production sector (E&P), supportive of a prospective rise in drilling and rig activity.
- CBRE Research breaks down the late 2017 energy pricing narrative and what it means for jobs in Houston and the metro economy during 2018.

Tipping point for jobs, too

While labor indexes continue to rise overall for the energy industry, employment activity has been concentrated in the services segment. Given that oil field services took the brunt of the losses during the extended downturn (roughly twice as many layoffs as E&P), the operators were forced to become considerably leaner due to upstream price pressure. As a result, the largest rehiring effects are service-related as the demand for drilling activity expands.

In 2018, new payrolls in the upstream sector will be more muted, though, as the employment index retreated sharply during 2017, indicating relatively slower hiring over the past 12 months. While the prospect of the return of energy-related employment growth could potentially boost job gains during the next year, the consensus estimates are in the 50,000 range, indicating that it is more likely that drilling activity will provide tailwinds directly to the E&P industry instead of any substantial widespread economic gains in the Houston metro.

Vintage 2018 Sweet Texas Tea

The 'sweet spot' of $65 to $70 per barrel (bbl) oil prices where both the energy industry and consumers are generally content is based on the outcome of a variety of global factors. Chief among them is the OPEC-led production cuts which began in December 2016 and are extended now through the end of this year, with targeted production cuts of 1.7 million barrels per day. Most recently, geopolitical instability in Iraq and Saudi Arabia and supply cut expectations have also contributed to the recent rally in crude prices.

As break-evens continue to improve for shale producers, U.S. onshore production has increasingly backfilled OPEC's yielding of its market share, providing signs that sharp increases in crude prices is unlikely during 2018. Instead, industry experts are generally forecasting oil prices to remain stable with some tapering over the next year as global crude markets remain relatively oversupplied.

But the energy sector is beginning 2018 with crude oil prices north of $61 bbl and according to recent survey results from the Federal Reserve Bank of Dallas, represent what could be the cycle's tipping point into stabilization and expansion this year.

More Info: http://cbreemail.com/collect/click.aspx?u=jRYOrR8N39Sma9Q0S3qhF5tEf/O/pLuX&rh=ff00c2744293c04e21fb6fa0b744a43a98e52b20

Submit your logistics, material handling, or supply chain related company news in DC VELOCITY's Industry Press Room section or New Products section
  • Related Articles

    CBRE Research: Houston industrial vacancy declines, tightening expected through year-end

    DHL Supply Chain research reveals most companies have yet to fully implement an e-commerce strategy

    CBRE ARRANGES SALE OF TECHWAY SOUTHWEST INDUSTRIAL PORTFOLIO IN HOUSTON

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • The Home Depot opens automated DC in greater Atlanta

  • For container lines and ports, what a difference a year makes

  • Outlook 2021: What’s in store for logistics supply chain?

  • A guide to Brexit for ecommerce businesses

Now Playing on DCV-TV

Jlt procure rugged devices thumb

What it takes to procure the right rugged devices for your warehouse

DCV-TV 4: Viewer Contributed
Procuring new rugged devices for your warehouse is often a big decision and a significant investment. It needs careful planning and consideration. It involves more than ticking boxes on a spec sheet. It includes testing and getting employee buy in. And it's about finding a partner that can work with you to deploy...

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing