Oil prices are creeping up, and that means energy companies are tentatively starting to drill again, Reuters reports. Many drillers are starting to be optimistic that this time they really are on the other end of the horrific two-year slump. The downturn has caused oil outfits to shed employees and hemorrhage profits. Now as wells in the West Texas Permian Basin are again becoming profitable, producers are finally taking baby steps to crank up output.
There are signs that the expansion makes sense. US production is falling. And global supply growth is no longer outpacing demand.
Kirk Edwards, CEO of Odessa-based Latigo Petroleum, said his company will wade back in when prices reach $55 per barrel. That’s when he says they can take advantage of a perceived tightening of the market. Even so, he remains wary. “People are still not convinced there's a recovery yet,” he said. In West Texas these days, the mood is cautious optimism.
