LONGVIEW, TX (KLTV) - The up-and-down nature of the oil and gas industry continues to be a challenge for East Texas companies that deal in production, services and exploration.
In early summer we reported a rise in gas prices, but since then the price has fluctuated again. An economic expert says the industry will continue to have its highs and lows.
Dozens of companies in East Texas are directly or indirectly tied to the oil and gas industry. As oil goes up and down, so do they.
"It's going to be a trickle effect, it's going to work its way down. We were around 50-dollars a barrel for a while and it seemed like it was going
to level off, and it went down to the lower forties," says Michael Clements, Energy Weldfab vice president.
Letourneau University professor Dr. John Barrett says the back and forth prices will continue for several reasons.
"For communities where oil is such a big part of the economy, there's a huge impact. Are you producing more than you need? If you are then the price
is going to go down. If you're producing less, then the price is going to go up. What we're seeing now is kind of a confluence of factors at the small end of the scale, that are keeping prices down. Political instability changes the supply, OPEC agreements
changes the supply," he says.
It all comes down to consumption and production. and oil supply is plentiful.
"Everyday oil is being produced and everyday oil is being consumed. Even some of the technologies we've got out now allow pockets of oil to be exploited
relatively quickly," Barrett says.
At 43 dollars a barrel, the current price of oil is stable.
"It's much more stable than where it was at the start of the year when it was in the 20's and 30's," Clements says.
Barrett says though it looked like the market was coming back in summer, there's really no movement.