Oil prices this week hit multiyear highs above $70 a barrel, punctuating a global economic reawakening that has raised the prices of a broad range of commodities. But that doesn’t mean Louisiana should expect more drilling activity any time soon, according to one local energy expert.
After OPEC and its allies forecast higher demand and boosted output, Brent crude, the international energy benchmark, rose 1.3% to $70.25 a barrel, notching its highest close since May 2019. Meanwhile, West Texas Intermediate futures, the key U.S. gauge, gained 2.1% to $67.72 a barrel to close at its highest level since June 2018.
Higher oil prices tend to create more opportunities for drilling, which is generally a good thing for Louisiana, says David Dismukes, executive director of the LSU Center for Energy Studies. However, a spate of recent sociopolitical and economic events will likely complicate matters for the U.S., leading Dismukes to predict that hardly any, if any, new drilling activity will take place across the country—including Louisiana—in the near future.
“I wouldn’t be jumping up and down and expecting a huge employment response,” Dismukes says, noting the total active U.S. rig count is around 457. “Oil and gas companies are still licking their wounds from COVID-19 and their precarious financial situations before the pandemic.”
Since the pandemic, many companies have incurred significant… Continue Reading Full Story >>>