WEST TEXAS (KWES) - OPEC member nations plan to cut their production of oil for the next nine months. It's all to keep the price of crude up. A local oil expert says this is good news but it wont be a miracle for the Permian Basin.
After cutting production at in November of 2016, OPEC decided to extend the cuts even longer.
After the cuts, some rigs started operating again.
People went back to work and things began to look up here in the Basin.
"We have seen a slight increase in prices. Prices have gotten up to that $50 a barrel range, which is a positive thing. People out here would like to see the prices continue to go up," said Stephen Robertson, Executive Vice President of the Permian Basin Petroleum Association.
How will this big announcement affect the industry locally? Robertson says things won't change just yet.
"I wouldn't say we are anywhere close to where we have been in the not too distant past, but we are doing much better out here than a lot of other basins and we have been able to recover a lot better out here than a lot of other basins. People are going back to work, if they haven't already been back to work for a good while," said Robertson.
It is this reason that Robertson says the Basin won't notice anything new for a while. These cuts have been in effect for months and we are already reaping the benefits.
"If people were already operating off of what production levels were currently and where prices are currently, they probably are going to continue their operations in the same manor. The announcement today (Thursday) was a positive in a sense that production cuts are going to stay, but it wasn't a positive in the since that they are going to make even deeper cuts or extend the cuts even longer than nine months," said Robertson.
Oil prices dropped about five percent on Thursday. Robertson says this usually happens when there are big announcements in the industry.