The Permian Basin continues to demonstrate resilience and growth as we close out the fourth quarter of 2024. A combination of rising energy prices, stable production, and economic expansion has positioned the region as a key driver of the U.S. oil and gas sector. Below, we analyze the latest data on oil and gas prices, production, labor market trends, and the housing sector.

Energy Market Trends: Prices on the Rise

Crude oil and natural gas prices saw notable increases in Q4. The price of West Texas Intermediate (WTI) crude oil closed the quarter at $71.72 per barrel, marking a 5.2% increase compared to the third quarter. Natural gas prices also saw strong growth, with Henry Hub natural gas averaging $14.17 per barrel of oil equivalent (boe), up 15.6% from Q3.

Perhaps the most striking turnaround came from Waha natural gas pricing near the Permian production hubs. After being in negative territory at -$9.18 per boe in Q3, Waha prices rebounded to $3.58 per boe, reflecting improved transportation dynamics and stronger demand.

Production Growth Despite Fewer Rigs

Oil production in the Permian Basin increased to 6.5 million barrels per day (bpd), reflecting a 1.3% quarter-over-quarter growth and a 5.7% year-over-year increase. This production growth comes despite a 1.6% annual decline in the active rig count. However, improved drilling efficiencies, including longer lateral well lengths and a higher number of wells drilled per rig, have driven higher output levels.

Labor Market: Employment Rises While Unemployment Falls

The job market in Midland-Odessa remained strong in Q4. Total nonfarm employment grew by an annualized 1.2%, slightly trailing Texas (1.3%) and the U.S. (1.6%). For the full year 2024, Midland-Odessa job growth was 0.9%, lagging behind both Texas (1.7%) and national averages (1.3%).

The mining, logging, and construction sector added the most jobs in 2024, reflecting the energy sector’s strength.
Conversely, the professional and business services sector saw the sharpest decline, followed by the government sector.

Unemployment rates in Midland and Odessa also improved. In Midland, the unemployment rate dropped from 2.7% to 2.5%, while in Odessa, it fell from 3.8% to 3.6%. Both rates remain significantly lower than the Texas state average of 4.2%.

Wages Show Strong Growth

Wage growth was another bright spot for the region. In December 2024, average hourly earnings in Midland increased to $36.98, while Odessa’s average wages rose to $32.92. Texas as a whole saw wages grow to $34.18.

Odessa led in annual wage growth with an 8.6% increase.
Texas wages increased 6.0% year over year.
Midland wages saw modest growth of 0.9% compared to 2023.

Housing Market: Sales and Prices Climb

The Permian Basin’s housing market showed continued strength in Q4. Home sales in the region rose by 8.3% in December alone, and were up 18.9% year over year compared to December 2023.

The median home price in the region also edged up 1.7% to $328,000. However, the Permian Basin remains more affordable than Texas as a whole, where the median home price was $344,000.

Conclusion: A Strong Finish to 2024

The Permian Basin wrapped up 2024 with solid economic and energy sector growth. Rising oil and gas prices, increased production efficiency, and a strong labor market have positioned the region for continued success in 2025. While some sectors, such as professional services, saw job declines, the energy-driven growth in wages and home sales suggests optimism for the coming year.

As we move into 2025, factors to watch include global oil price fluctuations, potential regulatory changes, and continued technological advancements in drilling efficiency. Stay tuned for more updates as we track the region’s performance in the new year.