MIDLAND, Texas — What goes up, must come down. The same goes from the supply and demand of oil.
Right now with the coronavirus, demand is low.
“The coronavirus is lowering demand across the world because it’s hit China and they’re a big manufacturer," said Tommy Taylor, director of oil and gas development for Fasken Oil and Ranch.
"We're fully supplied so there’s not really a concern about running out of oil."
To offset the virus's impact, OPEC announced Thursday they were going to cut production by 1.5 million barrels for the second quarter of 2020.
“We’ve been as high as $55 at one point, but then a few days ago went down to $43 a barrel," Taylor said. "Their cut is about getting to a fair price."
Taylor says production here in West Texas is not going to change much.
To put in perspective, OPEC may be cutting 1.5 barrels a day but here in the Basin we make 4.7 million barrels a day.
“There’s been a drop a little bit but not significantly," Taylor said. "We’re still going to continue to produce oil and gas which is a great thing for our country.”
Even so, Taylor warns oil and gas companies need to be ready to adapt.
“Like the old Boy Scout motto says, be prepared," Taylor said. "That’s the best thing you can do is be prepared.”
For more information on OPEC click here.
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