Layoffs in the oilfields expected after crude oil prices dive

(CBS7 File Photo)
(CBS7 File Photo)(KOSA)
Published: Mar. 6, 2020 at 7:04 PM CST
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Oil prices took their biggest dive in years today dropping 10% in a single day.

It’s a great time to fill up the car with gas prices slipping lower and lower, but maybe not the best week for oil workers.

The coronavirus isn’t just infecting thousands of people, the disease is also wearing down the oilfields.

CBS7 met with financial advisor Mickey Cargile who said this week’s oil price dive signals an even steeper drop in the demand for oil.

To offset those falling prices, Cargile said our rig count will likely drop in the coming months.

“The rig count is what supports our local economy. So I believe you’re going to start seeing that fall and I believe you’re going to that hurt our local economy to some degree.”

While it’s hard to forecast specifics, Cargile said job security isn’t going to stay strong so long as the virus keeps its strong grip over the market.

He said this is one of the many slumps the Permian Basin has seen in its time.

“There’s either too much oil or not enough and so we have boom and bust economies,” Cargile said. “And so I don’t want to call this an outright bust but you’re going to see the rig count and you’re going to see some layoffs because of that.”

Cargile said the situation is made worse by Russia announcing it will increase oil production to further hammer down prices and put pressure on American companies.

He says that will push demand for energy even lower.

“And then eventually once the virus scare dissipates you’ll see the demands go back up.”

Cargile said gas prices react slower than crude oil but he expects them to sink below $2 in the coming months.