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Economist: Oil prices may keep falling until June

CORPUS CHRISTI – Fifteen bucks. That’s all Irma Santillanes can spare for gas most days. Until recently, that made driving her 1999 Pontiac Bonneville a real guessing game.

“Usually, I’d put $15 in the tank … and hope for the best,” she says, while filling up at a Sunoco service station on Corpus Christi’s Southside. The mother of two from Corpus Christi is among the millions of motorists praising yet another day of declining fuel prices, a trend that at least one economist says may continue until spring break.

The average price for a gallon of gas in Corpus Christi was $1.98, though it sold for less than $1.90 in many places, according to the fuel-tracking website Gasbuddy.com. A year ago, it cost $3.01.

Related: Oil group hears city’s priorities for year

Price Trends for Corpus Christi

Corpus Christi Gas Prices Provided by GasBuddy.com

Early Wednesday, West Texas Intermediate crude sold for $46.05 a barrel, but roared back to close at $48.62. The price of Brent crude closed at $48.84. Both varieties have lost nearly 60 percent of their value since June, prompting some energy businesses to scale back production, even trim staff.

Santillanes, 53, spent her usual $15 on fuel at a Sunoco at Rodd Field and Holly roads, one of more than a dozen service stations that sold gas for $1.89. The needle on her gas gauge showed her tank afterward as being four-fifths full.

“Lately, $15 has been good enough to get me where I need to go,” she said. “That can last me a while.”

Gas generally sold for less in central Corpus Christi, though fuel for under $2 could be found all over the city. The Citgo service station at Ayers Street and Manshein Boulevard sold gas for $1.85 on Wednesday. That’s where Efrain Lopez was filling up during his lunch break.

The Calallen man has kept tabs on the trend since the fall and hoped it would continue until Thanksgiving. He was grateful the free fall hasn’t let up.

“It definitely made Christmas a lot better this year,” said Lopez, 35. “What (money) I saved from putting in the tank … went right under the tree.”

Some experts say things may get worse for the industry before it gets better. They have speculated oil may eventually trade for as low as $20 a barrel before the market pitches upward again.

The first signs of a rebound may not come for four to six months, said Lee D. Vendig II, president of LDV Oil & Gas Consultants in Dallas. Large oil companies will continue drilling in the Eagle Ford Shale and Permian Basin energy plays, but only in strategic “sweet spots” that are both lucrative and lower in cost.

“The biggest thing we need to see … is for global demand to increase. And that hasn’t budged for over a year,” Vendig said. “There has to be a rebalancing in the marketplace.”

Falling fuel prices has been good news for consumers, locally and nationally.

According to the tracking company Autodata, national auto sales in November hit 17.2 million, the highest November since 2003. Hugo Marciales, marketing director for All Star Mitsubishi in Corpus Christi, said sales were stronger two years ago, at the beginning of the Eagle Ford Shale energy boon, then plateaued. Sales have begun to roar back the last eight months, particularly of medium-sized fuel-efficient vehicles.

“There may have been people who weren’t ready to (buy) before the boom” Marciales said. “They’re certainly doing it now … because they’re less concerned about the expense on gas.”

 

his article was written by Chris Ramirez from Corpus Christi Caller-Times, Texas and was legally licensed through the NewsCred publisher network.

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