Even as oil teeters around $50 – a price many oilpatch watchers say is too low for comfort -- Texas may be gaining a new advantage on the global market.
It’s shale oil production.
Oil fell below $50 dollars a barrel last week for first time since last December. A global oil glut, OPEC cuts and U.S drilling activity all tug at the international price – sometimes in opposing directions.
Apart from the day-to-day fever chart of daily closing prices of oil, some analysts see a clear U.S. opportunity in shale oil production.
Shale oil production, says it advocates, is a Texas counterpunch to OPEC's traditional price-setting.
The lower prices, in the meantime, should not cause local panic, says Samuel Rines, senior portfolio strategist with Avalon Advisors of Houston.
An oil price dip, he says does not meaning we’re sliding into the economic depths of the 1980s oil bust.
Instead, Rines tells NewsRadio 740 KTRH, new efficiencies mean the Texas oilpatch can still prosper even at lower oil prices.
Rines says America has become a world power again in oil production, he says. That would be newfound might at a time when Saudi Arabia and other OPEC countries stick to traditional methods to try to control oil prices.
Rines says the U.S. has already made it much harder for the Saudis, Russians and others to steer prices.
While OPEC nations are following production-cut guidelines, but in the U.S., there’s increased production in Texas and other states.
The Saudi Oil Ministry says world inventories are falling at a pace that slower than anticipated, which may mean the current timetable for production cuts will be extended.
Meanwhile, U.S. crude production is now north of 9 million barrels a day – and could reach a record 9.73 million barrels a day in 2018, forecasters say.