By: Julia Deng
MIDLAND - Crude oil prices plunged Monday to a new five-year low, closing at under $50 per barrel for the first time since April 2009.
"A lot of us thought [oil prices] had bottomed out at around $70 dollars, but apparently [the market] isn't making a turnaround as quickly as we had predicted," said Morris Burns, a Midland-based oil consultant and former Executive Director of the Permian Basin Petroleum Association.
"If we're not above [$50 per barrel] by the end of February, then it's time to start worrying.
According to Burns, cold winter weather usually drives demand for crude oil and natural gas up, with prices peaking around January and February, and dipping during the spring and summer.
It's the two million extra barrels of oil on the worldwide market right now, he said, that are dragging demand - and profits - down.
"This drop isn't too significant right now," Burns told NewsWest 9. "We haven't burned up the excess yet, that's all. We have this fuel sitting in storage. As we burn up the excess, then it will go up. If we haven't burned up the excess by the end of February, then we have a problem."
Stocks tumbled Monday alongside oil prices, with U.S. indexes suffering their biggest losses in three months.
The Dow sank 331 points, its worst showing since October, while the S&P dropped 38 points and the Nasdaq ended the day 74 points down.
"Energy stocks took a hit [today]," said Burns. ""We are seeing a number of companies that have cut back on their drilling prospects for the first quarter, maybe the first two quarters."
Oil workers throughout West Texas are already feeling the effects.
"Business is slowing down, our hours went down and we might lose a couple people," said Gabriel Brito. "Things are okay right now, though. We're just hoping it doesn't get as bad as it did in 2008."
During the height of the financial crisis in 2008, crude oil prices dropped below $35 per barrel.
"I remember shops closing [in Odessa], rigs stacking up [and] a lot of people getting laid off," said Brito.
Burns called potential layoffs could be a "silver lining" of the declining oil market.
"The people that get laid off are going to be the ones who show up to work late [and] do sloppy work," he said.