It was a very painful day for the Oklahoma oil and natural gas industry as the price a barrel reached negative numbers for the first time ever.
Some experts predict a rebound may be further away than we want to hear.
Wall Street’s closing bell Monday felt more like the pain and agony bell for the oil and gas industry.
Experts said it’s not all bad news because of contracts.
“You're in a situation where the market is oversupplied with oil and that is what is driving the price down,” said Chad Warmington, President and CEO of the State Chamber of Oklahoma. “Today is a unique day in a sense you have a contract expiration tomorrow but if you look at the June contracts, the price in the $20 range is where people expected it to be on Friday.”
COVID-19 isn’t helping matters due to a low demand and either is a current conflict between Russia and Saudi Arabia.
President Trump suggested a purchase for the country’s Strategic Petroleum Reserve.
“We're looking to put as much as 75 billion barrels into the reserves themselves that would top it out,” said Trump. “That would be first time in a long time it's been tapped out…would get it for the right price."
Back home in Oklahoma state and local officials are left to crunch numbers. The state prepared to tap into its billion-dollar reserve over the next two years.
“We compete on the world market, things that are outside of our control,” said Warmington. “What OPEC (Organization of the Petroleum Exporting Countries) and Russia and others do really impacts us because we are a player on that international market.”
The industry has always bounced back, and it will according to experts but at a very slow pace.
“Are we going to be back where we were two years ago in prices? Probably not,” said Warmington. “Are we going to have the rig count that we had? Probably not, but I’ll also say I didn’t think we were going to have the run that we did have.”
As if Monday’s news wasn’t already bad enough, economists at Oklahoma State University predicted as many as 10, 000 jobs could be cut in the energy sector alone.