MIDLAND, Texas — Texas entered uncharted territory within the last month due to the price of oil falling dramatically.
Since then, the industry has struggled to regain a foothold for a couple of different reasons.
"We kind of got the double whammy because we have the Saudis and Russia fighting over market shares, so they have increased production which that was a big win for us and then the virus pandemic right on the back of that," Tommy Taylor, director of oil and gas operations at Fasken Oil and Ranch said.
Both Taylor and Senator John Cornyn seem to agree that Saudi Arabia and Russia flooding the market with cheap crude oil has a lot to do with the issues we've been having domestically.
With so much oil in supply, businesses are struggling.
"That’s not a supply issue, that’s a demand issue and so we have all this quarantine going on, people aren’t flying, people aren’t driving, businesses are shut down and not using energy," Taylor said.
Taylor doesn't believe that prorating oil will necessarily solve the issues in the Permian Basin.
"There's a lot of talk of proration maybe if that would help. I'm not sure it would. We've never seen it before, we don’t know what the market’s reaction is going to be. Certainly were going to be in a low price environment through the summer," Taylor said.
Taylor believes that demand for oil will jump back up once COVID-19 passes.
"Low oil prices will be a big stimulus for the country and you hear that the cure for high oil prices is high oil prices…the same thing on the low side so if the price is really low that makes it easier for the consumer to buy and that hopefully will bring demand back quicker," Taylor said.
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