Not Time for Panic in the Oil Patch…Yet
It’s been a tough time in the oil patch lately. Wyoming is one of the states that has benefitted from new technologies for extraction that has meant a quantum leap in domestic oil supplies.
But at the same time, demand is heading down with more efficient vehicles, and fewer total miles driven on average.
In short, we are swimming in oil at a time when demand is down.
“I think the consensus here is that oil prices will remain subdued for quite some time,” says Patrick Dehaan, oil analyst with Gasbuddy.com.
“I personally think the floor for prices is right about where we are now, between $53-$57 a barrel,” he told K2 Radio news. “This level, while low, shouldn’t push too much production offline. It’s the $40 a barrel price that should be concerning and would cause job losses in the oil patch.”
Dehaan says that most experts on the Chicago Exchange, where he is located, feel that prices will eventually level out around $65 a barrel.
One problem is OPEC, who are all over the map on a pricing strategy.
But, the first signs of worry in the industry are coming out of Texas. Oil jobs are being cut in Houston and some rigs may remain idle for a time to let demand catch up to supply.