State of the Permian Basin panelists predict oil industry recovery
The oil industry is the heartbeat of West Texas, but it’s been beating far weaker now than it has in years.
On Thursday, a panel of experts discussed the state of the Permian Basin and what it will take to revive it.
For months, the oil industry has taken a beating between a price war and global pandemic hammering prices to historic lows.
However, panelists said it’s not too late to turn it around.
In recent months, oil production has been nothing short of disastrous in the Permian Basin.
Since the start of the year, we’ve seen rig counts fall to their lowest in years, mass layoffs, even oil prices plummeting below $1 into the negatives at one point.
“It’s a pretty surreal moment,” Quintana Capital Group Senior Partner Don Evans said. “When you think about it, what’s happened to the Permian basin it’s as surreal to me as 911 was.”
Panelists at the state of the Permian Basin said a lot of things contributed to this downturn.
The price war caused an oversupply of oil while the coronavirus pandemic ground travel to a crawl all over the world sinking demand to unprecedented lows.
Panelists say stay at home orders are loosening and the price war has been settled so in time the supply and demand imbalance will start to level off at least partially.
When it does, they said the industry’s infrastructure needs to be solid, so investment is needed right now.
Dr. Bradley Ewing at Texas Tech said this dark blue line projects our GDP’s recovery time based on our current investment amounts while the red line shows how it could climb with significantly more investment.
“We would see GDP going up quicker and sooner and back to normal much sooner than before and basically bring us out of that recovery period,” Ewing said. “What we want to see, and bring us out of this downturn quicker.”
Of course, panelists explain that kind of change can’t happen overnight, so some patience is needed.
Panelists said West Texans are tough people and although it will take some time to recover, Permian workers are up to the task.