Houston: Comerica Energy Sector in ConsolidationHouston: Comerica Energy Sector in Consolidationhttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=8462015-06-04T14:23:00Z2015-06-04T00:00:00Z

HOUSTON MSA - Houston’s energy sector is consolidating in response to the reset in the global oil market, according to the Comerica Regional Economic Update from May 21, 2015.

Drilling, engineering and service companies are reducing operating budgets and reducing staff by the thousands. Not only are drilling crews idled, but everything from automobile sales to shipping activity is being affected.

The impact of the radical changes to the energy sector on the Houston economy are still unfolding. So far, we have seen a one-way drag since rig counts started falling at mid-year 2014.

Recently we have seen oil prices firming to near $60, but that does not reverse the shock to the oil and gas industry and will not be enough to turn the tide of energy sector consolidation.

If oil prices stabilize at $60 per barrel, or increase, we expect to see global drilling activity firm up in 2016, as existing production from shale reservoirs follows a rapid decline curve.

Graphs showing trends for many sectors through first quarter 2016 are in the report.

Source: Comerica Economic Insights

See Houston Market Research for Comerica's May 2015 report under Market Overview.

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