Big Oil is booming! Big Oil is bust! So, which is right? It can be difficult to know the truth. Was this one of the key topics at the November 2016 Texas Bankers Association Annual Strategic Opportunities Conference?
Banks need to have industry experts, who can determine the most important trends in order to create innovative financial products. They need to know which sectors are growing and which are declining for the sake of proper financial allocation. Therefore, knowing whether Big Oil is rising or falling is very important, especially for Dallas based NexBank.
Big Oil is Rising
You can’t live without energy. The sky high housing market of the oil rich North Texas area suggests that Big Oil has never been better. They seem to be experiencing a boom.
Big Oil is Falling
The peak price for West Texas Intermediate (WTI) crude oil was back in 2008. High prices encourage more bank loans and production. Oil services company, Baker Hughes reported that 2016 oil rigs were being cut – the remaining number were the “fewest since April 2010.” This data suggest a bust.
Booming Texas Banks
Bankers cannot depend on any single sector for all of its profits or it might struggle during tough times. NexBank is a good example of diversification. It is not sitting on its laurels. Its CEO John Holt discussed “Reinventing Community Banking: Perspectives on Competing by Innovation,” at the aforementioned conference. Innovation can handle boom and bust cycles.
Of course, Texas has seen plenty of booms and busts and it still remains strong. The best bank will offer a diversified financial product mix, like NexBank. Besides, mortgages and commercial loans, it added student loans to expand its reach. Big Oil is essential and won’t go away; neither will smart banks, like NexBank.