U.S. oil prices drop below zero, experts explain why
The price of oil plunged below zero on Monday, a first for the oil industry.
Experts say it's because America is running out of places to store oil.
"There's been excess amount of product on the market place, and the prices have collapsed- they've actually gone negative, which is the first time it's ever happened." said CEO of Douglass Distributing, Brad Douglass.
"Most of this is due to the virus and the demand drop because of the virus," said Dr. Richard Denne, a petroleum geologist and the director of Texas Christian University's energy institute.
He says because millions of Americans are not driving as much they don't need the gas they normally would, so the demand for oil right is low.
He says while this is great for the consumer and retailers it's the employees who will be paying the price and eventually there will be long-term effects.
"On March 13th, there were 407 rigs in Texas as of two weeks ago, which was the last official count, there were 262 rigs. So that's a significant drop of 145 rigs." Dr. Denne said.
Dr. Denne said it's going to take more than a few months for the economy to recover from all the ways the coronavirus pandemic derailed it.
"I think we're looking at maybe end of the year, into next year before prices and demand go back to the way they were at the beginning of this year." Dr. Denne said.