Oil companies adapt to market drop

Updated: Apr. 24, 2020 at 4:38 PM CDT
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WICHITA FALLS, Texas (TNN) - After hitting negative numbers this week crude oil prices have started to climb back up.

Oil companies are working to recover while demand has dropped.

“In fact, we set new global, state and national production records just in the month of March,” petroleum economist Karr Ingham said.

Wichita Falls company Cobra Oil and Gas has a lot of its production in North Dakota.

The price drop made them have to shut it down.

“Even now at 17 dollars, the price is negative up there so we had all our production shut-in,” Cobra Oil and Gas vice president Bob Osborne said.

Luckily no jobs were lost, as many were just moved to different positions.

“Maybe there’s some maintenance that needs to be done, so we turn them from a lease operator to a maintenance type of person,” Osborne said.

Ingham says that consumers will see low gas prices at the pump for a while. Until a possible rise when the demand catches back up to the supply.

“When demand starts to go back up again that demand curve that’s going up may intersect with the supply curve that’s going down and that’s a recipe for prices to shoot back north,” Ingham said.

When that will happen is still anyone’s guess.

“Until we are, what could be regarded as on the other side of this coronavirus as a phenomenoN and certainly an economic event, I’m afraid that is how long it’s gonna take,” Ingham said.

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