MIDLAND, TX (KWES) - Despite the price of crude oil steadily increasing within the past month, local experts are warning about possible fluctuation in the coming months.
"Thankfully, the market is inching upward," said Stephen Robertson, Executive Vice President of the Permian Basin Petroleum Association.
The price of oil closed at just over $45 dollars a barrel Sunday. Some are warning against rejoicing too soon.
"Some people out there have talked about, well there is just a certain price point that everybody can go back to work and that is not really true," said Robertson.
Experts said last year when the crude oil price increased after being down since 2014, many companies started sending people back to work and drilling more, which brought the price back down again.
"What people want out here is to see that price continue to tick up, slowly but surely, and start to stabilize," said Robertson.
Some predicted a full recovery or stabilization of the market in mid 2016. Experts said the price for crude oil has gained $10 dollars in about a month, which is a good sign for the market.
The experts said the culprit of the price increase could be supply and demand leveling out.
With the current downturn, drilling in the U.S. is significantly decreased. At this time last year, 905 rigs were operating in the country. As of April 29, 420 rigs were being used.
The Permian Basin has seen major cutbacks as well from 238 rigs to 134.
As oil prices begin to creep back up, oil companies are still suffering through the downturn and have even tried banding together to become more profitable. The Halliburton and Baker Hughes merger raised concern from other companies and the government in fear that the deal would create a duopoly. The Justice Department sued to block the deal citing that the merger would lead to higher prices by eliminating competition in markets for almost two dozen services and products in the oil and gas industry.
Experts said the failure of the merger will allow for more competition in a suffering market, but many agree the best thing for the market right now is leveling out supply and demand.
"The demand is there. The demand grows everyday. It's not that we are decreasing demand worldwide. If we are decreasing the product we are putting out there and if there is less of it for people to buy, the prices are going to go up," said Robertson.