(Photosource: Jean Beaufort.)
By Mitch Borden
Oil companies in West Texas are currently seeing low prices for their crude. One industry forecast for the year predicts 2019 may not start with a bang, but new pipelines being built in the Permian Basin may change that.
The new year is starting off a bit slow for the oil industry in the Permian Basin, with West Texas Intermediate, or WTI, trading around $45 per barrel.
Prices are nearing the point at which many companies break even when drilling for oil in the region according to the Aaron Vandeford. He’s the director of the oil and gas consulting company Enercom.
Vandeford predicts low prices will continue for the time being but will increase in the Permian Basin later in the year when three major pipeline projects go online.
He says, “Near term, we’re going to continue to see some headwinds for the producers, but we see that getting taken care kind of in the latter half of 2019 into 2020.”
Once Permian Basin producers have access to the new pipelines they will be able to bring around 2.1 million more barrels of oil a day to the market according to Enercom’s report. Vandeford expects WTI will rise to around $60 a barrel by the end of the year.