Houston-based Apache Corporation lost nearly 25 percent of its value Wednesday, as oil prices continue to decline amid the coronavirus scare and price war between Saudi Arabia and Russia.
Other oil companies are also seeing double-digit losses in the stock market, stoking fears of possible layoffs throughout the industry.
“The less money that comes in, the more money they need for basic operations,” says Jay Young, CEO and founder of Dallas-based King Operating Cooperation, an independent oil and gas operator. “You may not see anymore drilling. That's what happens. When budgets are cut, new drilling goes first.”
Still, Young says sit tight, don't panic. The price of oil could hit $60-65 a barrel before the end of the year.
“You're going to see a lot less rigs. A lot less oil in the market at the end of the year. That will drive oil prices back up, and I think higher than it has in a long time.”
“So we're going to export less oil. You're going to see a lot less oil come out of Saudi Arabia. You're going to see a lot less oil come out of Russia, because they need the higher prices,” says Young.
There's talk of a possible oil bailout, but the American Petroleum Institute rejects the idea.