LAFAYETTE, La. (KLFY)- Last week, oil prices plunged to the lowest they’ve ever been in U.S. history in the wake of the ongoing COVID-19 pandemic.
Last Monday, crude oil trading was below zero. Today, oil trading closed at $12.90 a barrel.
Experts say the COVID-19 pandemic has contributed to halting the demand for oil, resulting in a decline in oil prices and production.
Gifford Briggs, with the Louisiana Oil and Gas Association, said, “We saw a 300% decrease in the price of oil at one day where oil went below all historic prices, crossed the 0 threshold, and ended down at $37 negative. At one point trading as low as 55.”
A week ago today was the first time in U.S. history oil trades were negative.
“People could not take physical delivery of the crude, and so when they couldn’t take the physical delivery of the crude, the price kept going lower and lower and lower, until we saw it cross the 0 line to -$37,” said Briggs.
Louisiana’s Oil and Gas Association says the price of natural gas has also decreased.
“Natural gas is feeling the same pressure since November to today,” explained Briggs. “We’ve seen roughly 40-50% decrease in the price of natural gas well over a $1 in value. And that is far below what is needed for our gas producers here in Louisiana to be able to be successful.”
COVID-19 is crushing local economies, but experts say essential businesses have adapted.
“Business evolved. Business figured it out. Business was told to keep the public safe and stay open and they did it. I’m also hearing wonderful things on their employees being safe,” Louisiana Association of Business and Industry Stephen Waguespack said. “We have so many industries that are taking temperature checks, checking their employees, and their rates of employees that have been working actively and not getting sick, it’s unbelievable how successful they have been.”
The Louisiana Oil and Gas Association also says the future of the industry depends on the economy’s demand for oil.