Updated: November 17, 2020 06:50 PM
Created: November 17, 2020 05:30 PM
ALBUQUERQUE, N.M. — Lawmakers received an update Tuesday from one of the state’s largest industries—oil and gas.
The oil and gas industry, which makes up a large chunk of the state’s budget, took a big hit from COVID-19 back in March.
With the 60-day legislative session quickly approaching, lawmakers are keeping a close eye on oil production in the Permian Basin in southeast New Mexico.
“Crude markets or oil markets—prices have recovered significantly since Q2. Q2 was really a period up upheaval. Prices went even negative for a period of time,” said Bernadette Johnson, vice president of market intelligence at Enverus.
Johnson said the pandemic sent oil prices plunging earlier this year, which was bad for New Mexico since the state relies on the industry for a significant source of revenue.
“When COVID impacts first started, when there were stay at home orders, folks were sheltering in place or staying at home, not driving their vehicles, not using as much energy, it impacted crude markets directly,” she said.
Johnson said prices have recovered to around $40 a barrel, but there’s still a bumpy road ahead.
“Going forward we’re still treading water, we’re still kind of facing an uphill battle of sorts,” she said.
Johnson said there are about 54 oil rigs online in New Mexico. As the price of oil rises, more will come back online.
“So this is an area to watch, as prices improve, rigs would show back up, we’d start drilling wells. This is where you would start to see additional signs of recovery,” Johnson said.
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