OKLAHOMA CITY (KFOR) – Oklahoma oil companies are feeling the pain from COVID-19 after a record-breaking price plunge.
“When it’s good it’s really good, but when it’s bad it’s really bad and right now it’s like the worst ever,” Dale Howe said. “Who has a product that isn’t worth anything and we literally pay them to take it?!”
The demand for crude cratered on Monday to a shocking price of -$37.63 per barrel, falling more than 300% for the first time in history.
This unprecedented time is halting Dale Howe’s family business in Hennessy.
“I’ll just store it, get my tank full, and then shut our wells in,” Howe said.
But storage in Oklahoma is becoming critical.
Cushing, the main hub of the U.S., is reaching its limit.
University research predicts a minimum of 10,000 Oklahomans are set to be out of a job.
“It’s an absolute disaster for Oklahoma,” UCO Professor Jonathan Willner said. “It’s just devastating that they have no revenue coming in from new sales.”
“Each month you are going to basically paying to stay in the oil business,” Eks Wye Pollock from Sandollar Exploration said.
The domino effect is spiraling down to investors like Sandollar Exploration in Edmond.
The wells they rely on could soon be dry.
“I get the income from the oil production, but then I also have to pay for expense bills, so with no money coming in, there’s my negative cash flow,” Pollock said.
With June contracts taking a hit as well, the price people will see at the pump will continue to drop.
However, the numbers are a terrible sign for people like Dale, who are now struggling to stay afloat.
“I would have to quit taking a paycheck and then hopefully we can pay our bills,” Howe said.
Oklahoma State University believes Oklahoma’s recovery is expected to lag behind the nation.
The economic recovery will be slow through this summer and even into the winter, saying it will get worse before it gets better.