With prices already tanked, forecasters are now starting to estimate how much global oil demand will fall because of the COVID-19 pandemic.
Oil and Gas Journal Managing Editor of Economics Conglin Xu said it will likely be a steep drop.
"I expect that oil demand this year will decline 13% from last year to 87 million barrels per day. The size of the collapse is almost six times heavier than the collapse during the 2008 financial crisis period," Xu said.
Xu said without production cuts, there will be a global oil surplus of as much as 15 million barrels a day with only about 2 billion barrels of total storage capacity available. That situation would force the least profitable companies to close.
Shale play operations that account for much of Oklahoma’s oil production are already approaching a break-even point, with few positioned to survive long around $20 a barrel.
"Prices of $40 to $45 a barrel needed to avoid some pretty widespread bankruptcies. We’re not at $40 to $45 per barrel now," said Oil and Gas Journal Chief Editor Chris Smith. "I’m not a price predictor, but there’s a good, long distance to go to get back up to that level."
West Texas Intermediate crude closed under $19 Friday; by Monday morning, it had sunk to $13.10 a barrel, its lowest price since March 1999.
Oklahoma’s state budget assumes oil will cost almost three times that.