MIDLAND-ODESSA, TX (KWES) - For the first time in 12 years the trading price of oil dipped below $30 a barrel.
The dip happened Tuesday afternoon but was only temporary, the final daily barrel price was settled at $30.44. Experts say this is good news for consumers, drivers and car salesmen, but very bad news for workers in the oil industry who could experience long term consequences.
Vice President of Crude Oil Marketing at TexLa Energy Products, Gary Moore said, "I think we're going to see more bankruptcies and more consolidation of assets. People who are sitting on cash right now will be able to buy assets."
The question keeps coming up as to why prices are so low, oil expert, Morris Burns said there are several factors, "It's just a perfect storm of things that drive the price down. We've got a strong dollar, we haven't had any hurricanes in the gulf of Mexico in the last couple of years, we don't have any type of armed conflict anywhere in the world right now with the producing nations."
According to Burns, because of new technology the Permian Basin has nearly doubled its production in the last nine years but the demand is just not there.
Moore says workers getting laid off could become more common over time but those who stay will continue to help grow the market, "People who survive will emerge stronger and smarter. They learn to bring into play more efficiency in the business which ensures they'll stay longer."
Experts say they expect the barrel price to remain under $50 throughout 2016.