Oil prices jump ahead of OPEC emergency meeting

local news

MIDLAND, Texas (Big 2/ Fox 24)- Oil prices have dropped dramatically in recent weeks, a price war plus a global pandemic can be to blame. But oil prices (WTI) rose 8-dollars in just two days.

“OPEC is having an emergency meeting on Monday. Russia is going to participate in that meeting. They are talking about some fairly dramatic decreases in the amount they are producing. The market is pricing some of that in right now that some type of agreement will be reached,” said Ray Perryman, economic analyst.

“Oil prices reflect right now, as if the market is assuming something will happen in this meeting. We’re not sure exactly what, but that some progress will be made. It went from 20-dollars to 28-dollars in two days. And strangely enough, even though it is still a low price it’s the highest 2-day increase percentage-wise in history,” said Perryman.

“Maybe then we can pull some supply off the market and prices can get back up- if we can get back in the $40’s and $50’s then we can economically produce,” said Kyle McGraw, Board Chairman, Permian Basin Petroleum Association.

So, if coronavirus wasn’t a factor- would oil prices still be booming?

“Now we would be back in the $50’s probably if we didn’t have that coronavirus- because the fear is to stay in the $20’s very long- you’re gonna see $80’s and $90’s possibly because so many people are going to go out of business. We began to see all the public companies announce cuts in budgets, major cuts, I heard Chevron going from 17 rigs to 4 rigs- those are jobs,” said McGraw.

“There’s a lot going on right now. This is an unprecedented situation. We’ve got some numbers outon our website (https://www.perrymangroup.com/) for people to get an idea of what it might look like and they are welcome to go look at those, but it’s going to be a very, very big hit. But, the key is- it’s going to be a very big hit, that could be a very quick hit. That is- it happens, then we can start coming back from it fairly quickly,” said Perryman.

“Nothing cures this problem until we have a healthy world, and a healthy economy and a healthy America and a healthy American economy,” said McGraw.

And now we wait to see what comes of the OPEC meeting on Monday.

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