(The Center Square) – As oil prices slump amid the coronavirus pandemic, industry advocates are seeking to assure the public that production in Texas should continue without disruption.
“Just as all families and businesses are being impacted by COVID-19, the oil and natural gas industry is no exception," Todd Staples, president of the Texas Oil & Gas Association, said in a statement Thursday. "While this current dilemma is applying severe pressure on prices and causing stress to our economy, our members are reliably delivering the oil and natural gas products that fuel our daily lives.”
Globally, countries have instituted travel restrictions due to the spread of COVID-19, the novel coronavirus that was first detected in China in December. Elected officials across the U.S. are urging Americans to stay home, and not to travel anywhere unless for essential needs.
Oil and gas companies continually analyze the marketplace and their operations and make adjustments to ensure the safety of their workers and continued operations, he said.
"Oil and natural gas companies have proven themselves nimble and effective in finding new and better ways to produce their products as they navigate difficult circumstances," Staples said. "The fundamentals of the American economy are solid and our infrastructure is strong, yet with reduced demand and excess supply, capital expenditures will be reduced which will impact employment levels until a market rebound occurs.”
As the coronavirus impact reverberates through the economy, the longer term outlook remains uncertain.
“The consequences for Texas of the drop in prices [last] weekend will depend on two questions: 1) how low, and 2) how long,” Dale Craymer, president of the Texas Taxpayers and Research Association, told the Brownsville Herald. “Of course, we can’t look at the impact of a drop in oil prices on Texas in a vacuum. Behind all this is the economic impact of the coronavirus, which is still uncertain.”
Texas Comptroller Glenn Hegar had estimated last year that oil prices would be roughly $50-per-barrel through most of 2021. The price of West Texas Intermediate (WTI) crude was roughly $26 per barrel early Friday.
With travel bans precluding demand, the market may require months to rebound.