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Coronavirus: Glut of oil is good news for drivers, not such good news for Texas oil drillers

Less people driving means a lower demand for gas – and lower gas prices.

AUSTIN, Texas — There’s plenty of oil to go around these days and lower prices at the pump, thanks to the shrinking demand caused by the coronavirus outbreak and Saudi Arabia flooding the market with cheap oil.

Good news for drivers, but bad news for Texas oil producers.

That’s why the Railroad Commission of Texas – the state agency that regulates oil and gas production – is looking into possibly forcing the industry in Texas to cut back production in order to reduce oil inventories. That would lower the surplus and raise income for drillers.

It’s a controversial proposition.

RELATED: Gasoline demand hits lowest level since spring 1968 nationally

At a public hearing Tuesday conducted by video conference, the State’s three railroad commissioners heard testimony from oil executives who seemed spilt on whether to support the cutbacks. Smaller producers generally want production cut back, while larger producers are opposed to it. Commissioners will vote for or against oil production cuts at its meeting next week.

In the meantime, Central Texans continue to reap the benefits of lower prices at the pump. The irony, of course, is there's lots of cheap gasoline – but for many who are sheltered at home, there’s nowhere to go.

WATCH: COVID-19's impact on oil and gas

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