Permian Basin Economic Indicators November 6 (pb2603)

Third quarter 2026

Employment in the Texas Permian Basin grew in the three months ending in September, and unemployment rates fell. Single family housing permits and the number of home sales in the region decreased, while the median price of homes sold increased. Oil production, the number of new wells drilled and the number of active rigs all moved up.

Energy

Crude oil prices fall in third quarter

The price of natural gas in the Permian Basin (Waha) rose while the national benchmark price (Henry Hub) fell in the second quarter (Chart 1). Henry Hub's average price dropped to $16.67 per barrel of oil equivalent (BOE) from $17.11 in the second quarter, while Waha, the hub in West Texas close to the producing wells of the Permian Basin, moved up to $10.56 from -$16.95 per BOE over the same period.

Natural gas in the Permian has frequently seen negative pricing in the past few years because the growth in supply has largely been a byproduct of shale oil production, and pipeline capacity is frequently constrained. When gas production approaches the physical limits of transportation and storage infrastructure, producers pay to have the natural gas removed to avoid shutting down oil production.

Despite the ongoing conflict in Iran having curtailed the availability of crude oil, the price of West Texas Intermediate crude averaged $86 per barrel in the third quarter, a quarter-to-quarter fall of 7.6 percent. The decline was mostly due to the interim ceasefire in mid-summer that allowed Middle East exports to recover. The third-quarter price is a 31.9 percent hike from the year prior. Following the collapse of the ceasefire and months of sustained elevated prices, WTI rose to an average price of $96 in October.

Oil production rises

Oil production in the Permian Basin rose 0.4 percent to 6.9 million barrels per day (mb/d) in the third quarter from 6.8 mb/d in the second quarter. The number of new wells drilled, and the number of active rigs increased 8 percent and 5.7 percent, respectively, over the same period (Chart 2). The boost was aided by smaller producers seeking to capitalize on higher oil prices as well as a modest uptick in activity driven by the expectation of new pipelines that will further alleviate in-basin natural gas constraints.

Labor market

Employment rises in Midland-Odessa region

Total nonfarm employment in Midland-Odessa increased 1.3 percent from June through September (Chart 3). Total U.S. nonfarm employment edged up 0.4 percent, and Texas nonfarm employment rose by 0.2 percent over the same period. From June to September employment in mining, logging and construction, government, professional and business services, and manufacturing all increased in the Midland-Odessa region. Meanwhile, employment in trade, transportation and utilities, leisure and hospitality, education and health services, and information and other services all fell over the same period.

Year over year, employment in Midland-Odessa grew 1.7 percent in September. Employment for the year increased in most sectors except in trade, transportation and utilities, financial activities, and information and other services which experienced employment declines.

Unemployment rates fall

The unemployment rates in both Midland and Odessa were lower in September compared with June (Chart 4). Midland's unemployment rate fell to 3.0 percent in September from 3.3 percent in June, while Odessa's jobless rate decreased to 3.6 percent from 4.1 percent over the same period. Meanwhile, Texas' unemployment stayed the same at 4.4 percent in September.

Housing

Single-family housing permits decrease

Single-family housing permits in Midland were up 7.2 percent in September compared with June but down 11 percent in Odessa (Chart 5). Altogether, from March to June, single-family permits were down 4.7 percent in the region, similar to the 2.3 percent statewide over the same period.

Home sales decline while prices increase

Home sales in the Permian Basin fell 8.8 percent from June to September and were down 1.9 percent from a year earlier (Chart 6). The nominal median price of homes sold in September was $346,000, up 2.7 percent over the past three months and 4.7 percent from a year ago. By comparison, the median price in Texas was $329,000 in September, down 0.9 percent year over year.

After adjusting for inflation, the real median price of homes sold in the Midland-Odessa region in September 2026 was up 2.6 percent from a year prior, while real prices were up 1.1 percent in Texas.