It may be a wonderful time to fill the car or truck up with gas, but it's a perilous time for Midland's hardworking oil workers.
In addition to jobs being on the line, the coronavirus is threatening the health of the entire region.
The negative way prices have reacted could signal an even bigger drop in oil demand in the future, according to financial adviser Mickey Cargile of Cargile Investments.
To help balance those sinking prices, Cargile told KOSA that the number of rigs will likely get smaller in the coming months.
“The rig count is what supports our local economy,” Cargile told KOSA. “So I believe you’re going to start seeing that fall and I believe you’re going to see that hurt our local economy to some degree.”
Cargile added that as long as the coronavirus stays in the news, people’s job prospects will continue to be in trouble.
The Permian Basin has not been immune to current events.
“There’s either too much oil or not enough and so we have boom and bust economies,” Cargile told KOSA.
“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 more tenuous because Russia said that it would increase oil production, which would further keep prices low. At the same time, this pressures companies in the U.S.
Amid such a backdrop, Cargile said demand for energy will become lower.
“And then eventually once the virus scare dissipates you’ll see the demands go back up,” Cargile told KOSA.
Cargile said gas prices, which often react slower to news than crude oil, will likely sink under $2 in the coming months.