MIDLAND, Texas — Working and living in the oil industry can be a real roller coaster. In the last couple of years, oil prices hit historic lows, and within the last last week, prices topped $90 a barrel for the first time since 2014.
In the Permian Basin, production is picking back up. Experts believe that the Basin is in the beginning stages of another oil boom.
This means more jobs and more money for the region, but letting oil prices get too high could create a different set of problems.
"The high price is obviously good for people who work in the energy complex, and certainly good for the producers, but for the consumers, it takes money out of their pocket and makes them reallocate their capital, money they would’ve spent on other things they now have to put in their gas tank," Mickey Cargile, president of Cargile Investment Management said.
As the price of oil has gone up, so have the prices at the pump. However, that's not the only area we could see a price increase if the price of oil rises too much.
"It also comes through the airfare," Cargile said. "It also comes through in utilities because we use hydrocarbons to generate electricity, so you know it’s a broad-based increase in cost, especially for manufacturing."
As of February 9, 2022, the price of oil is hovering just around $90 a barrel. Experts believe that the best spot for oil to sit at is right around $82 a barrel. However, they anticipate higher oil prices in the near future.
"We’re certainly ramping up in the Permian, and in 2023 we'll probably be back to record numbers again as far as production," Cargile said. "But where we are right now is we’re still in that growth phase to build up infrastructure so that we can produce more oil."
So what brings the price of oil down? More oil. Specifically, having supply outpace demand.
"Right now that would bring the oil prices down if OPEC could produce more," Cargile said. "They just simply can’t right now. They’re at maximum production so bringing on some of this other oil will help, and certainly as we watch our drilling rig count increase, that’s going to bring on more production in the Permian."