The Source: Oil Hits Highest Price Of 2015, But No Certainty In Market
Oil prices are always watched carefully—especially in Texas. Today’s oil price is at $56.58, a high for 2015.
The number of oil rigs operating in Texas has been cut by more than half since a year ago, according to Baker Hughes latest count.
Today’s spike is promising, but the increase in barrel price is unlikely to halt companies’ efforts to scale back. In the words of Karr Ingham, Amarillo-based petroleum economist, “the die has already been cast.”
Because of price performance earlier in this cycle, he argues that it’s too late for quick change. Even if prices continued to increase, the damage has been done. Price increases would improve the economy standing but would not enact immediate change that oil towns could see—such as reopening oil rigs.
Another factor complicating the current international oil industry is Saudi Arabia’s impact on the market. While the country has previously focused on crude oil production, Saudi Arabia is beginning to move into producing refined oil products, opening up their production capabilities. Though some question the strength of Saudi Arabia’s influence on the international market, Rice University Wallace S. Wilson Fellow in Energy Studies Jim Krane says the Middle Eastern country is still “calling the shots.” Their dominance may make it more difficult for other OPEC countries to interact with the oil market.
Have you seen the impacts of the current oil industry fluctuations?
- Karr Ingham, Amarillo petroleum economist and owner of Ingham Economic Reporting
- Jim Krane, Wallace S. Wilson Fellow in Energy Studies at Rice University