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Permian Basin Petroleum Index Has Yet to Turn the Corner

The government lowered its outlook for U.S. crude oil production in 2021, with expected output set to average 11.02 million barrels-per-day (bpd) for the year, the U.S. Energy Information Administration recently said. Though some notable indicators of regional oil and gas activity are on the rise, the Texas Permian Basin Petroleum Index has yet to turn the corner, declining for the 21st straight month in November.

Crude oil prices improved in November after retreating in September and October, with posted West Texas Intermediate crude oil averaging $37.26 for the month. However, that is still down by some 30 percent compared to its year-ago level.

November gas production – total monthly estimated production in RRC districts 7C, 8 and 8A (Texas Permian Basin) – posted its first year-over-year decline since 2012, as gas production continues its slow decline after peaking in March 2020. Permian Basin estimated crude oil production continues to hover around the 3.5 million bpd level after peaking at about 3.9 million bpd in March 2020.

The average monthly rig count for 7C/8/8A clawed its way back to 100 in November after falling to a low of 75 in July. The post-COVID rig count remains the lowest since 2012 but has been climbing for the past four months. The number of original drilling permits issued remains historically low as well, at levels not seen since 2002, and down by 60 to 70 percent compared to year-ago permit totals.

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

  • ◦Economy
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