U.S. oil prices jumped 6 percent: what could this mean for Permian Basin?

Local News

ODESSA, Texas (Big 2/ Fox 24) – Tensions continue to mount between the U.S. and Iran – after Iran reportedly shot down an unmanned U.S. drone over the sea.

Mickey Cargile, an economist of Cargile Investment Management, speaks on what this could all mean for the Permian Basin.

“Not necessarily disruptive to the oil market now if that escalates to a military conflict then certainly that makes a different situation,” Cargile says. “But as of now, I think that would have short term impact but no long term impact on the oil prices.”

Cargile also says current oil prices won’t necessarily impact oil production.

“I truly expect that oil prices will stay somewhere here in the ’50s for a while and that’s a good balance between supply and demand,” he says.

The 6 % jump in oil prices, may not have too much of an effect for oil producers and consumers here in the Permian Basin.

“It does look like the prices are going to trend a little bit higher over the near term,” Cargile says. “But our economy is functioning very well right here with the prices in them, and I think that would continue for some time in the future.”

For now, Cargile says, he doesn’t see any changes coming to the strong economy.

“I don’t expect the price increases we see in the near term would add additional growth to our economy because we’re already growing so fast. I do expect for things to stay extremely good right now. The reason we’re seeing a lot of utility right now is because supply and demand are pretty evenly matched… if there is a disruption in the middle east, then I expect the price to move higher properly up to the 70’s,” Cargile says.

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March 18 2021 03:00 pm