In its latest report, Baker Hughes reported the rig count stabilizes as oil prices hover around $40 a barrel. Holding steady at 251 rigs operating in the United States, Texas saw a one rig increase in the state, while the Permian Basin saw two rigs idled during the week.
The state of Texas now operates 104 rigs which is down from 455 this time last year. With seemingly little help from OPEC, the situation doesn’t look good for Texas oil drillers, who still aren’t happy with the current state of affairs in the oil fields. Earlier this month, OPEC announce that they would increase production to meet, what they saw as, increasing global demand. Unfortunately, the second wave of corona virus struck much of the world (including the United States) dampening demand for oil in the near term.
Light Sweet Crude oil futures closed the week at $40.43 leaving much to be desired by US shale oil operators. With persistently weak demand for oil, it doesn’t look like the nation will see higher prices any time soon. At the same time, electric vehicle manufacturers, like Tesla and Nio (in China) continue to roll out their fleet of electric vehicles which is reducing demand for oil even further. Soon, GM will begin to also produce electric vehicles which will continue to hurt the oil patch. BMW is also rolling out a plan for electric cars.
Is Elon Musk Moving to Texas?
The President touted that Elon Musk kept his word to him and will be moving some operations to Texas. According to the CNBC article, Tesla will be moving some of its operations to Austin, Texas providing approximately five thousand jobs, most of which are high paying. The mayor touted the plant will be an ecological paradise and will hit a lot of cylinders for Austin Texas.
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