Iran/U.S. tension causes oil price spike, could lead to more rigs

Local News

ODESSA, Texas (Big 2/Fox 24) – The death of Iranian general Qaasem Soleimani early Friday is creating uncertainty in markets, causing oil prices to rise by 4% in just one day. Brent crude oil futures hit their highest levels since April.

As of Friday, WTI was trading at $63 per barrel, continuing its run in the $60s that began on Dec. 13.

Local expert Kirk Edwards thinks that the number of $60 per barrel is crucial for rigs to come back to the Basin.

60 dollars has always seemed to be a magical number and we are seeing it again. It gives assurance – puts basement on what producers want to see out here to make these wells come in econolically and pay in a good period of time. So it’s really good news for th Permian Basin. With this oil price coming abck up shoudl help stabilize some of these companies where you not see that happen as much. If more things happen in the Middle East and othe production gets shut off we will see the oeprators out here pick up more drilling rigs and continue to drill and get a lot busier than where we were last year.

Kirk Edwards, President Latigo Petroleum

Without the current infrastructure to produce oil domestically, Edwards thinks this could have impacted the U.S. in a much more severe way.

If something like this would have happened four or 5 years ago before the Permain Basin got so big we would see 100 dollar oil today… but because we have our own domestic production now it is a safeguard against these higher prices.

Kirk Edwards, President Latigo Petroleum

According to the Energy Information Administration, the U.S. leads the world in oil production.

Country Million barrels per day Percent of World Total
United States17.9418%
Saudi Arabia12.4212%
Russia11.40 11%
Canada  5.38
  5%
China
  4.81
  5%
Iraq  4.62
  5%
Iran
  4.46
  4%
United Arab Emirates
  3.79
  4%
Brazil  3.43
  3%
Kuwait  2.91
  3%

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