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Dramatic upward revisions of crude oil production in Texas combined in August with strong crude prices and strengthening natural gas prices to propel the Texas Petro Index to a record high for the second straight month and lift the estimated number of workers on oil and gas company payrolls to a new high as well.
But the TPI also revealed that state regulators issued only 1,606 drilling permits, the fewest during any August since 2009, when oil and gas activity was in sharp decline. Fewer permits to drill could exert downward pressure on upstream oil and gas activity in the coming months.
“The Texas Petro Index continued its march into record territory in August, rising to 289.8,” said Karr Ingham, the economist who created the TPI and updates it monthly.
That eclipsed the old record, set in July, which itself was revised upward by Ingham to 288.2 from 287.7 due to ongoing, upward revisions of Texas oil production since the July 2013 TPI was released less than 30 days ago.
Also contributing to the record TPI in August were natural gas prices.
“While still lower than during the gas-driven expansion of Texas E&P activity from 2003 to 2009, they were solidly improved compared to year-ago levels and, thus, are providing upside support to the TPI rather than acting as a drag,” Ingham said.
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