By: Julia Deng
MIDLAND - Oil prices plunged 5 percent Monday to a new low, closing at about $46 a barrel for the first time in nearly six years.
Goldman Sachs released an oil report Sunday night, predicting prices would hit $41 in three months and $39 by mid-2015.
"At this point, none of us know what to call 'rock bottom' anymore," said Morris Burns, a Midland oil consultant and former Executive Director of the Permian Basin Petroleum Association.
"I thought we had bottomed out at $70, and again at $60."
Burns predicted "several more weeks of cold winter weather" would drive demand up, resulting in a turnaround in oil prices before the end of February.
The Goldman Sachs report projected crude oil to settle at $65 a barrel by the end of the year.
"Right now, we just have a perfect storm of all the things that drive prices down," Burns explained. "We have an economic slowdown in Russia, China, Japan and several Western European countries; we have two million excess barrels of oil on the [worldwide] market; people in the Southern Hemisphere aren't doing as much summer traveling as we expected; and we didn't have a Gulf hurricane or enough extreme winter weather to really increase demand yet."
"This bear market will likely be characterized by more of a U-shaped recovery in which markets take longer to recover," read the Goldman Sachs report. "[Prices] will likely rebound to far lower prices from where they sold off from."
According to Burns, qualified oil industry employees should expect no difficulty continuing to find employment throughout the Basin, although it may not be in an oilfield.