Price per barrel of oil drops about $10 in May

MIDLAND, Tx. (KOSA) -- The economy may be booming in the Permian Basin, but this past month has been a bad one for oil prices.

West Texas Intermediate Crude closed down $3.09 on Friday, which puts the price drop around $5.00 in just two days.

Oil is down to $53 and some change - a price not seen since February - putting the price per barrel down about $10.00 since the beginning of May.

In fact, it's been the worst performing month for oil prices in almost seven years.

"It's always concerning, but a lot of the decline that we have seen this month has been driven by the tariff discussion," local financial expert Mickey Cargile said. "So, it's really more news related than actual fundamentals."

Cargile said the blow boils down to four factors:

1. On Friday, prices fell based on the announcement of the tariffs against Mexico.

2. Plus, we have the tariffs on China. Cargile said people fear this could decrease the growth of The World Economy, which affects the demand for oil.

3. He said our oil stockpiles are growing, which is putting pressure on the prices.

4. Lastly, Cargile added, Russia has come out and said they may withdraw from the agreement to reduce their oil production.

Although, while Cargile said the drop is something the industry needs to watch, it should be business as usual in the Permian Basin.

"It's going to be a concern for the oil industry in total, but for the Permian Basin we can expect that we will continue to drill in this area - even though the price declines," he said.

Cargile admitted that he is beginning to see reduction of employee counts in some industry companies, either through retirement or layoffs.

“I expect that is going to continue to some degree, but the economy out here is going to stay strong," he said. "Even with $50.00 oil, that’s still a very good price for the assets that we have in this area.”