Amid Price War, Texas Oil Patch Is Coming Up Empty

[Elderberry]

Foreign Policy  By Jacob Wallace 4/7/2020

Thousands of workers wonder if the coronavirus shutdown will be the worst oil bust of all.

Across the Permian Basin, a swath of oil-rich land sprawling through western Texas and parts of New Mexico, rigs are groaning to a halt as massive layoffs sweep the industry. It’s ground zero for the fallout of the oil price war that erupted one month ago, ignited by a Saudi-Russian spat and turned into an inferno by the economic shutdown caused by the coronavirus and the subsequent lockdowns of entire countries.

U.S. President Donald Trump has repeatedly called for an end to the price war but to little avail. Markets bounced back briefly on April 2, when Trump said he had reached an agreement with Saudi Arabia and Russia to cut production, only for prices to fall again when it was clear the announcement was little more than bluster. Absent a deal, the low price of crude could rip away the United States’ newly attained status as a net oil exporter and make the kind of frenzy that has fueled U.S. production for a decade unfeasible.

More immediately, the collapse could mean that workers on the ground who are being sent home may never return to the patch. The Permian Basin has seen downturns like this before. But after this year, things might never be quite the same again for the most productive oil field in the country.

More: https://foreignpolicy.com/2020/04/07/price-war-texas-oil-patch-coronavirus-pandemic/

[IsailedawayfromFR]

The cycles have always been bad.  I recall WTI was $3/B when I started work and in 1998 traded for only $17.69/b.

Sure people will be laid off and businesses bankrupted.  This is the nature of this highly volatile commodity.

But guess what?  Nothing permanent to hurt it is happening.   The oil is not going anywhere and the technology will not become unknown.

Prices will return and the industry will thrive, as will Texas.

My years in the oilpatch include one layoff after working for a major for 27 years and I learned this:  Make lots of money during the good years and do not squander it, as you will need it during the down years.  I have no regrets working a career in the oil business as it remains a fascinating, interesting industry, and will be around long after me and any reading this are dead.