Oil prices are on the up, and local economists say that will benefit the Greater Houston area.
Demand for crude is rising as states reopen their economies and Americans start to travel more. On Thursday, West Texas Intermediate hovered just under $ 70 dollars a barrel, at 68.81. Economist Patrick Jankowski, with the Greater Houston Partnership, says that's close to our sweet spot.
“There’s a magic point we try to it, and that’s where oil prices are high enough to simulate growth, but not so high they are depressing consumer demand,” Jankowski said. “I think around 70 dollars a barrel is probably that point.”
He says this time last year, demand for crude had dropped by about 20%. Today, he says demand is only down about 5%. He estimates we'll get back to normal levels sometime later this year or early next year.
“Even if you don’t work for an oil and gas company, you probably benefit from it. They’re the ones who sponsor the ballet, or they’re the ones who buy the ads. The people who work for the oil and gas industry pay pretty well and that money gets distributed throughout the economy,” Jankowski explained.
He's confident the worst of the COVID-19 pandemic is over for the oil and gas industry. However, he does warn government regulations, like on climate change, could potentially slow it down.