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Historic OPEC Deal Impact Remains To Be Seen

Posted at 5:19 PM, Apr 13, 2020
and last updated 2020-04-14 11:54:35-04

The local economic impact of OPEC's latest deal to cut 10 million barrels in production remains to be seen.

Oklahoma has five percent of the U.S. crude oil reserve and in 2019 was the fourth largest oil producer in the states.

The state's economy and employment rate still reliant on the oil and gas industry.

Coronavirus and an oil price war are both hitting the energy industry hard.

Halliburton has already reduced their workforce at the company's Duncan field camp, laying off 350 employees and rumors of layoffs at other companies continue this week as production and demand continue tanking.

Tom Seng, the director of the University of Tulsa School of Energy Economics, Policy and Commerce, says the deal with OPEC to cut 10 million barrels of oil isn't as big of a move as it sounds.

"If you look at the grand scheme of things, we've probably lost minimally 20 million barrels of oil a day in demand and there are some projections that by the end of this month we'll have lost 30 million barrels of oil in demand globally," Seng said. "So, you look at it and go, wow, 10 million barrels of oil cut is huge except not when you've potentially lost 30 million in demand,"

He says things could improve if people start traveling and working again come summer, but if the demand continues as is through the summer months, the economic ramifications could be bleak.

So far, he says the impact of this latest OPEC deal is a game of "wait and see."

A representative with Halliburton sent us this statement, "Unfortunately, Halliburton is making reductions at our Duncan field camp as we adjust our workforce to reduced customer activity. This was a difficult decision but is a necessary action as we face challenging market conditions."

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