Rumors of Oil's Death Have Been Greatly Exaggerated
Column Published in syndication December 09, 2020

Among the myriad industries affected by the COVID-19 pandemic is one particularly critical to Texas: oil! As much of the global economy shut down to slow the spread of the virus this spring, fuel demand plummeted. Prices plunged, with futures contracts even briefly going negative. The industry initiated a rapid shutdown of drilling activity, which rippled through an enormous supply chain and supporting retail and service enterprises in the affected communities and the entire state. Many service firms and large swaths of production and reserves changed hands, as capital resources for small and mid-sized firms became virtually nonexistent.

This is NOT the 1980s
Column Published in syndication May 20, 2020

Oil production costs are down sharply in Texas in recent years, but they are not yet at a level to maintain viability given current prices and uncertainty. As a result, significant disruptions in oil production areas are occurring. The industry initiated a rapid shutdown of drilling activity, which rippled through an enormous supply chain and supporting retail and service enterprises in the affected communities and the entire state. Banks with large energy loan portfolios are being strained, and mid-stream and downstream investments are being deferred. Although concentrated in a few areas, the fallout permeates all regions of Texas.

Chaos
Column Published in syndication April 22, 2020

Oil markets are in turmoil. In January, oil prices were trending in the upper $50s per barrel. Now, spot prices are a fraction of that level and futures prices actually went decidedly negative for the first time in history for certain contracts as they neared maturity. Traders scrambled to avoid taking delivery of oil they didn't want or have any place to store.

Necessary, not Sufficient
Column Published in syndication April 15, 2020

Since the beginning of 2020, oil prices have fallen from the upper $50s per barrel to $20 or less. Needless to say, the fallout has dramatically hit major production areas, including those in Texas. A recent agreement between OPEC, Russia, the United States, and other nations is a clear step in the right direction, though it won't solve the problem immediately.

Oil
Column Published in syndication March 11, 2020

Since the coronavirus outbreak began, slack has developed in demand for crude oil. Disruptions and quarantines have caused economic growth in China and elsewhere to slow. With the huge Chinese economy expanding less, slower growth has rippled out, and areas with significant outbreaks have experienced even greater negative effects. The result has been falling demand for oil and natural gas, and therefore downward pressure on prices. Early in the year, prices were in the $63 per barrel range; they had fallen to less than $42 by March 6.