MIDLAND, Texas (YourBasin) – A historic hit to oil prices. Crude plunging 24%, making Monday the worst day for WTI oil since 1991.
Over the weekend, the Organization of the Petroleum Exporting Countries, better known as OPEC, led by Saudi Arabia and Russia, fell apart. Saudi Arabia then launched a price war against its former ally. The question on everyone’s mind, what does this mean for the West Texas oil economy? Mickey Cargile, from Cargile Investment Management, says the basin should expect a slow down of drilling activity in our area.
Mickey Cargile says although the oil economy in West Texas will slow down, it is going to be the most active out of all drilling basins.
“It is because we are the lowest cost provider for oil production. However, that is still going to mean that there is going to be a slow down here. So there is going to be some pain. It won’t be as much as the other basins, but it’s still going to be painful.” He says.
Texas Governor Greg Abbott weighed in on the conversation Monday evening during a live interview on Big 2 News.
Governor Abbott says the state of Texas is doing everything it can to contain the spread of COVID-19, and once certainty is delivered about what is happening with the Coronavirus,
the sooner we will be able to increase international demand for the oil that is produced in the Permian Basin.