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OPEC Conference Determines What’s Next For Texas Oil And Gas Industry

The Organization of Petroleum Exporting Countries meets to decide on whether to cut production to stabilize oil market.

There have been many outlooks published on what to expect for the Texas and Houston economy in the near term.

The price of oil has a lot do with that, and what direction it will take could depend on whether the 14 OPEC member countries come to an agreement on Wednesday in Vienna.

“We’ve been in a lose-lose situation on a global energy basis for about two years now,” Bill Arnold, professor in the practice of energy management at Rice University’s Jones Graduate School of Business, said. “The question is whether OPEC is prepared to take the steps to reduce production by a relatively modest amount, 4 to 4.5 percent.”

If it does, Arnold said, that would likely stabilize the market.

Concern about some member countries – in particular Iraq and Iran – not agreeing to cut production has already had a negative effect on the price of oil.

The lack of an agreement would further depress the industry, Arnold said, and so there’s quite a bit of anxiety among Texas oil producers.

“I think they look to the OPEC meeting of having the potential to set a higher floor for oil prices,” he said. “But perhaps not anywhere near the level that we’re accustomed to.”

Should the OPEC countries agree to cut production, Arnold expects an initial bump in the price of oil.

But he said whether that bump leads to a stable market depends on how and when producers follow through.

Pump jacks dot the landscape outside Midland, a West Texas oil town.
Pump jacks dot the landscape outside Midland, a West Texas oil town.

 

 

 

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Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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