West Texas Intermediate crude oil futures traded at less than $1.50 a barrel today for the first time ever. The price was more than $63 a barrel when 2020 began.
Louisiana Oil and Gas Association President Gifford Briggs says the economic impact on oil is not good, but also not surprising.
“We’ve been talking about how low it can go and we’ve seen physical delivery well below $10, so it makes sense that the futures are now getting in that range,” said Briggs.
Briggs says the industry is facing a crisis, with many Louisiana wells planning to shut in 100% of their production due to storage constraints as companies are being told they can’t take delivery in May.
“Once you can’t sell your oil, the next option you have is to fill up the tanks on your property and the only thing you can do after that is shut it all in and that is going to have to be, unfortunately, a step that many producers in Louisiana have to take,” said Briggs.
Experts say expect widespread layoffs in the oil sector and a ripple effect through the already struggling economy.
Gasoline prices should continue to keep falling.
