Oil prices remained low throughout 2019, with the latter part of the year seeing analysts project persistently soft prices into 2020. According to December figures from the Energy Information Administration, Brent crude oil averaged around $63 in 2019, down from over $64 in 2018, with the West Texas Intermediate (WTI), the U.S. standard price, average sitting around $5 below the Brent price.
The depressed oil market has led to increased numbers of oil rigs coming offline and significant numbers of lay-offs across the sector. More than 200 oil rigs were taken offline across the United States in the first nine months of 2019, while 14,000 oil sector jobs were lost across the country during the same period, figures from the Labor Department show. In the twelve-month period from September 2018 to September 2019, the oil and gas sector added just 1,700 jobs in Texas, the lowest of any industry during the same period. In the three months to the beginning of October 2019, the payrolls of Texas energy companies were down by 5,000.
Analysts who spoke to the Houston Chronicle estimate that the price for a barrel of crude oil will fall below $50 in 2020, making it extremely difficult for many companies to turn a profit. The low prices are being driven by a global stagnation in demand as economic growth slows and oil production increases, including in the United States. The EIA estimates that despite the declining number of operating oil rigs, oil production increased in 2019 to 12.3 million barrels per day from 11 million barrels per day a year earlier. Production will rise again in 2020 to 13.2 million barrels per day.