Energy production up, but not by much

 

Coal production in Wyoming saw a bit of a bounce in the first quarter of 2017 while oil and gas production fell in the state, but the state's economic picture still looks bleak according to figures published by the Economic Analysis Division of the Wyoming Department of Administration and Information.

The average benchmark for West Texas Intermediate Crude was $49.56 per barrel for the month of March. In late 2016, oil prices began creeping up toward the $60 per barrel mark, but prices began a retreat in early 2017. The price for natural gas also declined, showing a drop after an early winter peak in late 2016. The price of Powder River Coal increased by a fair margin to $11.47 per ton, up significantly from its lowest price in late 2016.

In late 2016, oil prices were on the upswing after the Organization of Petroleum Exporting Countries (OPEC) announced that members agreed to cut production. In the U.S., oil production picked up significantly.

In Wyoming, the number of operating oil rigs increased over the year from 8 to 19. Other states such as Texas experienced even more significant rig count increases, going from 187 active rigs in April 2016 to 426 in this month.

The amount of new oil being pumped by U.S. rigs, however, is still less than the cuts agreed to by OPEC.

Overall, there were 7,200 fewer jobs in Wyoming in February 2017 than there were in February 2016. The only industrial sector in the state that saw increases in employment were the education, health and federal government sectors.

All other industrial sectors in the state saw decreases in payroll. Mining and forestry, which includes oil, gas and coal production saw the greatest decrease of 7.9 percent.

Overall, the state lost 11,500 nonfarm jobs in 2016.

Statewide, the number of first-time unemployment claims decreased by 26 percent overall year to year for the month of February. In the mining sector, the decrease was 77 percent. Such a decline possibly signals that the state's loss of payroll positions could have plateaued.


The employment picture in the state has filtered to other aspects of the economy. After the first nine months of FY 2017, sales and use taxes collected by the state and counties lagged last year's performance by 12.9 percent. Only the transportation and utilities sector saw a small gain.

Severance tax collections-a tax paid by mineral extractors-were down 10.3 percent year-to-year between FY 2017 and FY 2016.

On the personal income front, personal income in Wyoming shrank by 4.2 percent in 2016, the greatest of all 50 states. In the last quarter of 2016, Wyoming's personal income increased by 0.6 percent.

Home values across the state decreased 1.6 percent from February 2016 to February 2017. Wyoming was the only state in the eight state Mountain Division that had decreases in home purchase price. Colorado led the division with 10.6 percent price growth.

Permits issued for the construction of single-family dwellings increased 2.7 percent.

As Wyoming rolls toward summer, the question becomes what will happen with oil prices. As prices per barrel continued to drop, OPEC has announced further cuts in production, and many oil experts predict an oversupply of oil will be gone by June.

Russia, who is not an OPEC member, has indicated that it may not agree to OPEC's planned cuts. Such a move may keep oil prices lower throughout the summer, making it less economically attractive for US producers to expand production.

 

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