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'A horrific day' | Oil industry still feeling the effects of drop in demand that sent prices into the negatives

The president of the TXOGA said, "It’s probably going to get worse before it gets better, unfortunately."

AUSTIN, Texas — The oil and gas industry is still feeling the effects of a historic drop in oil prices on Monday. 

"We as a state, we as a nation, want to make sure that we are doing all that we can to try to protect and aid and support all of the men and women who are working in the oil and gas sector," said Gov. Greg Abbott at a press conference on Tuesday. 

Todd Staples, president of the Texas Oil and Gas Association (TXOGA), is part of the governor's task force to get Texas reopened. 

"We’re looking at legal issues; we’re looking at tax issues; we’re looking at permitting processes – anything that we can do to get this economy moving again, to get people employed again, because it’s been devastating," said Staples, calling this a catastrophic time. "We know that all businesses have been [impacted] negatively, but oil and gas specifically so. It’s horrific circumstances and historic circumstances. So we’re looking at all phases so we can continue to have the men and women that have made Texas the energy capital of the world continue to be strong and survive through this." 

Staples said people have already started to lose jobs because of the pandemic, adding to the number of jobs lost in the industry over the past year. 

"According to Texas Workforce Commission data, we’ve already had about 20,000 jobs lost from March of this year to March of 2019, and so that’s just the beginning of this phase," said Staples. "That really doesn’t pick up what companies have had to do in order to keep their doors open and keep people employed, so it’s probably going to get worse before it gets better, unfortunately."

He said they won't have the numbers to see the full effect until the end of April. 

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Staples said the oil and gas industry makes up 13% to 14% of the Texas economy. 

"We’ve seen numbers as well that if you look at the private sector economy and consider the direct and indirect influences, that it’s about 30% of our state’s economy," he said, explaining that is dependent on the price of oil and how robust the energy sector is at the time. 

Regardless, Staples said the industry is a major feeder into the state's economy.

"Yesterday was a horrific day, with negative trading, almost $40 a barrel, when it was trading for almost $40-plus a barrel not too long ago, so it’s really a shock to the system," Staples said.

RELATED: Oil prices plummeting: Why it's happening and what that means for Texas

Staples said economic shutdown caused a decrease in demand. He said supply can't just stop immediately to match the lack of demand.

"Oil production is kind of like a freight train or a big ship, and to stop immediately is just something that’s impossible," Staples explained. "So as demand dropped, supply had to gradually be ratcheted down." 

He said for things to turn around, the economy needs to get going again.

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