WTI Crude Price Dives Yesterday
by: Andrew Schneider, August 10, 2011 6:08:00 am
Falling oil prices are a double-edged sword for Texas. Like drivers across the country, Texans can expect to spend less on gasoline. But the less money crude commands per barrel, the less incentive oil companies have to go after supplies that are hard to reach.
Robert Dye is chief economist for Comerica Bank.
“It will likely result in marginally less drilling activity. I wouldn’t necessarily anticipate reductions or curtailments of employment in resource industries, but I would anticipate just them dialing back just a little bit here in terms of their activities to see where this price is going to go.”
Tim Evans, an energy analyst for Citigroup, says that oil prices were due for a correction and may have farther yet to fall.
“There are still some segments of the market that, in my view, are markedly overvalued.”
Evans says that oil prices have effectively been piggybacking on the stock market, masking an erosion of U.S. demand for petroleum. With markets tanking in the wake of Standard & Poor’s downgrade of U.S. debt, that mask has been ripped away.