Volatile times loom for NM’s oil patch

The Albuquerque Journal ^ | October 26, 2015 | Kevin Robinson-Avila

[CedarDave]

New Mexico’s oil and gas industry is bracing for another round of volatile ups and downs in crude prices that could push the market – and ultimately production in the southeastern part of the state – to its lowest point in more than a decade.

The industry has already been battered by steep price declines over the past year that cut the price of crude from more than a $100 a barrel in mid-2014 to about $44 now. That’s led to thousands of layoffs in New Mexico’s oil patch in the southeastern part of the state and, to a lesser extent, in the northwestern San Juan Basin.

But things may get a lot worse thanks to Iran, which is expected to aggressively ramp up its oil production next year as international sanctions are lifted following last summer’s deal designed to limit Iran’s ability to develop a nuclear weapon. Iran has enough oil reserves to rival Saudi Arabia on world markets and, as it begins to flood the West with new crude, prices are likely to crash to levels not seen since 2003, said Daniel Fine, associate director of the New Mexico Center for Energy Policy at the New Mexico Institute of Mining and Technology.

... “If Iran produces what it’s qualified to produce, world oil prices could drop back to the 2003 range of between $23 and $28 a barrel, which would have severe consequences for New Mexico. Harder times are coming.”

At $23 to $28 per barrel, New Mexico production would hit bottom, said Gregg Fulfer, Lea County Commission chair ...

[CedarDave]

Nationwide, more than 100,000 people in the oil and gas industry have lost their jobs. In New Mexico, among operators and other service-related companies in general, at least 6,000 people are estimated to have lost their jobs since prices began to crash, said Wally Drangmeister of the NM Oil and Gas Association.

The Iran deal which the administration is so proud of (and won't do a thing to stop their nuclear weapons program) will enable them to accomplish death to one sector of America's economy - our oil and gas production industry.

[Kartographer]

Hey ‘Supply and Demand’ that’s what was said when gas was almost 5 bucks a gallon just a few years ago.

[CedarDave]

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[thackney]

Same article discussed two days ago:

http://www.freerepublic.com/focus/f-chat/3353175/posts

[ontap]

Exactly...100,000 jobs in one sector which is more than made up for in low energy prices is what’s called capitalism...something all the apologists were firmly in favor of just a few shorts months ago!!!

[laplata]

Thanks, CedarDave.

[biff]

That’s cool, all us oil folks have lived with the cyclic nature of the oil industry for decades now.

With that said, no bitching when the price for gas hits $7.00 a gallon on the next cycle. And it will, believe me it will as the global glut of oil right now will only last awhile.

[CedarDave]

Damn, missed it. Didn’t check my NM keywords or titles for a previous post.
Thanks.

[thackney]

Don’t sweat it. Usually dups more than half a day apart are considered okay.

I just referenced it for previous comments.