It could probably be said that oil and gas prices had nowhere to go but up, after crude oil crashed into negative territory last month and pump prices fell to an 11-year low in Texas over the past two weeks. Now, there are indeed signs that oil and gas have hit bottom and started a slow climb back up. Crude oil is back in the $25-per-barrel range, and gas prices have ticked up a few pennies in the last week.
The rebound is not surprising to oil and gas expert Jay Young, with Texas-based King Operating Corporation. "Traffic is already backing up in Houston...look out your window and you can see people going back to work," he says. "And as you see people go back to work, they're going to start driving their cars."
Young tells KTRH that the past few months have been like the perfect storm hitting the energy sector. "Russia and Saudi Arabia dumped all this oil on the market in the United States, and then the pandemic happened," he says. "It just collapsed the oil and gas industry."
As for the long-term outlook, Young predicts a rebound in oil prices to as much as $65 a barrel by the end of the year. He notes that production cuts and shuttered rigs will eventually catch up with the current over-supply. "When demand picks up and we need that oil at the end of this year and the first part of next year, we're just simply not gonna have it," says Young. "We're not gonna have it because of no new drilling."
With summer just around the corner and most of the Covid-19 business shutdowns ending, the days of dirt-cheap gas and near-empty roads are likely over. "Go fill up your tanks today, go fill up that lawn mower that is sitting in your garage," says Young. "Go fill it up now, because oil prices and gas prices will go up."