Plummeting oil prices to affect East Texans amid coronavirus and the price war

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With demand for oil dropping worldwide, In part because of less travel, the texas energy industry could feel the effects. In turn, it would worsen the impact of a price war that just erupted between Saudi Arabia and Russia.

Drilformance manufacturing facility in Houston opened its doors back in December 2008, which was right after oil had dropped 70 percent.

“We manufacture drill bits, mud motors, and other equipment,” said Rusty Petree, Drilformance, LLC.

Parts used to drill for oil, an industry that is currently high on supply and low on demand. Due to the huge decrease in travel in both China and the United States surrounding the Coronavirus as well as the ongoing price war on oil between Saudi Arabia and Russia.

“It remains to be seen how long this will go on, how deep it will go, but the impact could be very real.” said Raymond Woodward, a Geologist in Tyler, who consults energy companies.

He says it could mean job cuts, which many oil producers and workers are already preparing for.

“If this goes on a few more weeks, a lot of people will be out of work, a lot of municipalities and counties, and state governments will see very real reductions in tax revenue and we’ll have another slump,” said Woodward.

“The energy industry is not for the faint of heart to begin with,” said Petree.

There are a lot of East Texans that travel to other parts of Texas for oil work, so while many could be affected if the oil issues continue, the news may not be all bad for local oil workers.

“Most of our production is mostly natural gas, with some oil and so called gas liquids, which is condensate, a really lightweight grade of oil, but this being dominantly a gas region, the direct impact won’t come, I don’t think, as quickly or acutely,” said Woodward.

Which gives this part of our state a little more time for the uncertainty to settle.

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