MONROE, LA. (04/21/2020)– Delivery, servicing, and demand are all affected by the crude oil price crash. Darren Oglesby with Oglesby Finance Group says if the prices stay low for an extended period of time, it will have a negative impact on the economy in not only the United States, but the world.
“A lot of our jobs and services, especially here in the south, are surrounded around the oil and gas industry economically,” Oglesby said. “So there will be people that will continue to lose their jobs, even some of the smaller industries will go away.”
Oglesby says because of COVID-19, consumers are staying home, which lowers the demand of oil.
“Nobody wants to take oil today, but the delivery of oil in the future, future contracts, does have an intrinsic value,” Oglesby said. “We’re not going to know what that really is until that day really gets here, but oil is worth something, it’s certainly not going to be free.”
While oil production continues with little demand and nowhere to store it, oil prices won’t be rising any time soon.
“Our hopes are in the future, when the economy open back up, and the consumer begins to trickle back out and starts to spend and starts to travel that we are going to increase demand,” Oglesby said. “We’ll have a demand increase enough to lower the supply that we’ve got in storage at a faster rate than we are producing it. Only then will we see prices stabilize and resume what we would call normal pricing.”
Oglesby says although oil is not worth something today, he does anticipate a demand in the future, which will make oil valuable again.