The news from the oil fields of West Texas has been one of declining oil prices and reduced activity in recent months.
A slight rebound in crude oil prices in the last 7-10 days has been good news for companies that do their business in the Oil Patch.
It may be premature, though, to pop open bottles of champagne.
The reality is that the turnaround in the region’s oil field economy will be slow the rest of the year, says S.K. Rogers and others involved in the industry.
Rogers, president of S.K. Rogers Oil in Levelland, said the price of crude oil is too low to justify drilling new wells.
‘It’s still too low for most of our producers,’ he said.
The problem is that the cost of new oil exploration has risen steadily in the last decade, along with the market price of crude oil.
‘What’s different is the inflation cost,’ he said. ‘Drilling costs have gone up. Basically the cost is up over 200 percent in the last decade.’