Falling oil prices are causing some drilling companies to cut back on operations in Texas.
Baker Hughes Inc. recently reported shutting down four of its rigs in the Permian Basin of Texas and New Mexico. Oil rig counts have also dropped in North Dakota’s Bakken shale formation.
From this year’s peak, oil prices have dropped 29 percent and are causing a slowdown in oil drilling operations. Since 2010, gasoline at the pump has reached an all-time low of under $3 per gallon, and crude oil is trading below $80 per barrel.
According to Mike W. Thomas of the San Antonio Business Journal, “West Texas Intermediate crude for January delivery settled at $76.51 a barrel recently on the New York Mercantile Exchange.”
Pulitzer Prize-winning oil historian and vice chairman of IHS Inc. Daniel Yergin said that oil prices in the lower $70s over a period of six months would slow oil production in the U.S., and now those who have rented rigs for the year are starting to see the impacts.