Matt Briscoe and Sam Flores
Corpus Christi, Texas–With gas prices starting to creep up around the state the Texas rig count is at 509, down from 511 last week and up from 479.00 one year ago.
Oil prices rallied on Friday to their highest values in three months and the highest so far this year, with Brent Crude reaching $65 a barrel and WTI Crude exceeding $55 per barrel.
Much of the focus has been on U.S. trade policies, including President Trump’s ongoing feud with China. Analysts seem to think that the spat could mean higher prices at the pump for consumers who seemed to enjoy the brief respite of sub $2 per gallon gasoline.
Rumors of possible deal between the two biggest economic powerhouses in the world would drive higher economic activity and could lead to higher energy demand and energy prices, according to industry experts.
Some oil traders are arguing that the higher energy prices will lead to higher gasoline prices in the U.S., but slightly higher prices at the pump mean that the economy and people prosper and the economic prospects are brighter.
What led to the spike last week Last week, hopes that a breakthrough in the trade talks could be reached, by larger-than-expected Saudi oil production cuts as part of the OPEC+ deal, and by restricted oil supply from Iran and Venezuela, due to the U.S. sanctions.
But looking at global market, should the U.S. and China manage to avoid a trade war with a deal of any sort that would drive up economic activity and market sentiment, energy and oil demand globally could turn out higher than currently predicted by analysts and organizations. Current forecasts cite the trade tension as the primary unknown of the pace of global economic growth, hence, the pace of oil demand growth.
A U.S.-China trade deal could raise gasoline prices but it could ultimately be the key driver of continued healthy global economic growth.
As for drivers here in Texas, the price at the pump could jump to $2.50 per gallon over the next few months and that doesn’t set well with heavy drivers. But the pain might actually be a sign of good things to come—it’s 6 in one and half a dozen on the other.