SOUTHERN ILLINOIS, (WEHT)- Oil prices are at a record low. They dipped into negative territory for the first time ever. People aren’t traveling. Oil companies now have a surplus in their tanks.
At the beginning of what was supposed to be the peak season for all companies in southern Illinois, a drop in oil prices has put them on the sidelines.
“Business like ours are just in a complete survival mode,” Chris Mitchell said.
After more than 75 years in the oil business, Chris Mitchell is facing something his family business has never seen before- negative prices for oil.
“We have not drilled the well since the first part of January. So it’s been [about] 95 days up to today [April 21] that we’ve drilled a well,” Mitchell explained.
His company isn’t the only one. J. Roy Dee is the third generation to help run Dee Drilling out of Mt. Carmel.
“With the coronavirus pandemic, they’re not using airline fuel and that created this huge surplus and that was the start of a big problem,” Dee said.
Dee says three months ago, there was a lot of oil. People were using around 100 million barrels a day. Now that number is down to close to 65 million.
Mitchell says the closed economy is the problem.
“The wheels of our economic machine in this country came to a halt,” he said.
Because of the coronavirus shut downs, Dee has laid off more than half of his staff.
“We can’t find things for them to do,” Dee said.
“The number of rigs that work in this area basically tells you the health of the oil industry as a whole,” Mitchell explained. “Now because the price of oil is so low and the industry is unhealthy, we become unhealthy. We don’t do much work.”
Mitchell and Dee both say before a decision is made to close their businesses, they will make changes to try to stay open.
These two companies agree the best way to help oil companies survive is the reopening of the economy.
(This story was originally published on April 21, 2020)