Oil Prices Make "Much Needed Turnaround" After Months of Free Fall

Oil Prices Make "Much Needed Turnaround" After Months of Free Fall

By: Julia Deng
NewsWest 9

ODESSA - Crude oil prices soared Tuesday to a one-month high, closing above $53 a barrel for the first time this year.

Prices climbed $3.48, or 7 percent, since Monday and 19 percent since Wednesday, marking the largest four-day percentage gain since January 2009.

"I really think we've hit rock-bottom and this marks the beginning of a steady price increase," said Morris Burns, a Midland-based oil consultant and former Executive Director of the Permian Basin Petroleum Association.

He attributed the oil market's "much needed turnaround" to a combination of factors, including increased demand created by extreme winter weather conditions in the northeast, heightened summer travel in the southern hemisphere and decreased production throughout the Permian Basin.

"All around here, we've seen rigs being stacked and things slowing down a little bit," Burns explained. "These rigs are coming back in and being stacked [and] they're not drilling new wells. This brings supply down. This brings the price back up. And when [that happens], they go back to drilling."

In the meantime, work opportunities continue to "dry up" in West Texas.

"A whole lot of people in the [Basin's] oil industry are on wages," said Burns. "One of the things that's really been cut is overtime."

Brian Worley, a local oil field worker, said he used to work more than 120 hours a week, running at least 2 loads a day, when crude peaked at $115 a barrel in June.

"Now, I'm barely getting 40 [hours a week]," he said. "I was lucky enough to have a boss who would pay me for 40 [hours a week] even when we didn't have that many hours of work to do, but things got bad for all of us."

Burns said the latest surge in oil prices "could be the start of a longer-term trend," rather than a short-lived spike.

"We should hit $75 by the end of the year," he said.