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Oil Prices Going Down-Should West Texans Panic? 6/25/12
CBS 7 News Reporter
June 25, 2012
Midland, TX - Oil prices are continually going down, but does this mean west Texans should panic? The black gold is the lifeblood of our economy so who can blame the people of the Permian Basin if there is uncertainty or even fear of another bust.
Financial expert Mickey Cargile says when it comes to the West Texas economy, you need to look at the rig count to get a full understanding of where the Permian Basin is financially.
The drilling rig count has been steadily climbing with in the past year, and Cargile does not expect it to slowdown.
(AP) - The price of oil declined Monday as Spain's banking crisis
added to concerns about the troubled European economy.
A tropical storm also moved away from the heart of America's oil production
in the Gulf of Mexico, reducing the chances for a sustained disruption in U.S. supplies.
Benchmark U.S. crude fell by 55 cents to end the day at $79.21 per barrel on
the New York Mercantile Exchange. At one point it had dropped to nearly $78 per
Oil fell after Spain asked for a loan to support its banking sector, which
is reeling from a collapse in the country's real estate sector. Spain hasn't
said how much it will ask for, though international audits say the banks need
Concerns about Europe's economy have helped cut oil prices by 25 percent
since May 1. Part of the eurozone already is in recession and analysts expect
its economy to slow down even more. That will further cut energy demand in a
region that consumes 16 percent of the world's oil. Demand for goods made in the
U.S. and China would drop as well.
Meanwhile, Tropical Storm Debby gave little support to oil prices after it
swept through the Gulf of Mexico without seriously hurting production or
The storm did cause a shutdown of about 44 percent of the Gulf's oil
production and 35 percent of its natural gas production. But by Monday many
workers were returning to the 189 production platforms and 22 drilling rigs that
had been evacuated.
Independent petroleum analyst Jim Ritterbusch said the impact on production
wasn't sustained long enough to affect oil prices. Supplies are at the highest
level since 1990. One weekend storm won't make a serious dent, Ritterbusch said.
"We have a nice cushion right now," he said.
Debby moved northeast and its winds weakened overnight to a maximum of 45
miles per hour as it neared the Florida panhandle.
At the pump, U.S. retail gasoline prices fell by 4 cents over the weekend to
a national average of $3.41 per gallon (90 cents a liter), according to auto
club AAA, Wright Express and Oil Price Information Service. That's 52 cents a
barrel cheaper than the first week of April, when the national average peaked
for the year.
In other futures trading, heating oil added less than a penny to finish at
$2.5385 per gallon while wholesale gasoline added 7.59 cents to end at $2.6458
per gallon. Natural gas added 6.9 cents to finish at $2.694 per 1,000 cubic
Brent crude, which helps set the price for oil imported into the U.S., was
nearly unchanged, adding 3 cents to finish at $91.01 per barrel in London.