According to the US Energy Information Administration, global consumption will increase by 5.4 million barrels/day this year. With the recent OPEC decision to only increase production by 1.5 million b/d, this leaves the output below pre-pandemic levels.

Normally, this kind of increase in consumption and OPEC deciding to keep production low would have US exploration activity surging. Not this time, however.

There are several factors at play here. Ranging from paying down debt to investors that have stopped lending to the industry. This, along with energy companies under pressure to reduce carbon footprints who are moving their investment money to renewable alternative energy sources.

I always like to wrap my brain around how this could affect the Houston housing market. While I was working on the data points for this post, I found out that Houston is actually only 52% recovered from the job losses that occurred during the pandemic. While its way too early to find out what happens with oil, and how that will affect the local economy, its important to remember that Houston has made big strides in diversifying its economy.

For a snapshot of oil and gas employment in the Houston area, at the height of the last boom (2014), there were around 58,000. End of May was 34,000. So, yeah, we are quite a few off from that even now.