HOUSTON (Reuters) - Upstream oil companies wound down hiring in November, the Texas Independent Producers and Royalty Owners Association (TIPRO) said on Friday, ending five straight months of job growth.

WHY IT'S IMPORTANT

Hiring in the upstream sector, which includes activities related to drilling and producing oil, can serve as an indicator of the health of the oil and gas industry. Companies bringing on more employees could imply more drilling to come.

TIPRO represents nearly 3,000 independent producers and royalty owners across Texas, home to the prolific Permian Basin which accounts for just under half of total U.S. crude production, according to the Energy Information Administration.

BY THE NUMBERS

Direct Texas upstream employment slipped last month by 1,500 positions to 194,400 compared with October's employment numbers, according to TIPRO.

Jobs in oil and gas extraction fell by 600, while oilfield service hiring slid by 900 positions.

The U.S. rig count is down by 34 from a year ago to 589, according to data from oilfield services firm Baker Hughes.

CONTEXT

The U.S. oil industry is preparing for a new administration next year, with President-elect Donald Trump and Republicans expected to roll back regulations and encourage more oil and gas drilling.

KEY QUOTE

"...TIPRO looks forward to working with the new administration to unleash the true potential of the U.S. oil and gas industry and will advocate accordingly on behalf of our members," said Ed Longanecker, president of TIPRO.

(Reporting by Georgina McCartney in Houston)