The oil and gas sector in Texas has been through a slump for more than a year, with the novel coronavirus exacerbating the downturn.
A new deal reached with OPEC, however, could provide much-needed relief for the long-suffering industry.
NewsWest9 reported that oil took a $34 per barrel nosedive since the start of 2020. The problem is twofold, experts told the station.
Ray Perryman, president and CEO of The Perryman Group, said the sector is at the mercy of COVID-19 and worldwide shutdown it has caused. “We were threatened with big increases in production at a time that demand was falling," Perryman said.
Saudi Arabia and Russia increasing their oil production did not help matters.
“At the moment it's something of a crisis because we're out of storage space, and they're still going to be producing more every day and there's no place to put it,” Perryman told NewsWest9.
The OPEC deal struck on Easter Sunday is expected to take nearly 10 million barrels off the market and keep it competitive despite low demand during the outbreak. According to Perryman, it is a road to a solution.
Still, oil producers in the Permian Basin are leery of the deal.
Tommy Taylor, director of oil and gas operations at Fasken Oil and Ranch, has a wait-and-see approach while his company tries to navigate a new normal. There is the possibility Fasken will have all of its rigs frozen by the end of April.
"If we could get back to $40 dollars [per barrel], we'd consider doing some drilling projects," Taylor said.
Perryman maintains optimistic that there will be a resurgence in the Basin given Washington’s willingness to lend a helping hand.
“The stimulus will help and the OPEC deal will help,” he said. “I think we can come back fairly quickly.”