By Mitch Borden
As the coronavirus pandemic continues to shake global markets—and as the price war over crude oil between Russian and Saudi Arabia goes on—oil companies are trying to figure out how to survive with oil prices hovering around $20 dollars a barrel.
In Texas, that’s led some oil companies to ask the Texas Railroad Commission, the state’s oil and gas regulator, to limit how much oil companies can sell.
In a call with reporters, Ryan Sitton—one of three commissioners on the Texas Railroad Commission—said, at the moment, there’s too much oil on the market, which has sent global oil prices crashing.
In Texas, it’s hitting the Permian Basin especially hard.
According to Sitton, some companies are selling a barrel of oil for a net price of $6 in some areas. This is forcing companies to make hard decisions.
“I do know producers a lot of producers are beginning to cut already," he admitted, "[oil companies] are just shutting in wells and curtailing based on the economic environment.”
Some oil companies, like Parsely and Pioneer Resources, have asked the state to limit oil production in the hopes this would help stabilize the oil market. Currently, oil producers are pumping more oil than the world's economy needs, which is driving oil prices down.
Sitton said while a formal decision on curtailing oil production hasn't been made, an April 14 meeting is tentatively set for companies to discuss the proposal.
