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By Canadian Press

Bad signs

Plunging oil prices point to ‘deep collapse’ in sector, drilling firm CEO warns

Apr 21, 2020 | 4:40 PM

CALGARY – The CEO of one of Canada’s largest drilling rig contractors says plunging North American crude prices on Monday and Tuesday are signs that the oil industry is headed for a “deep, deep collapse.”

On Tuesday, U.S. benchmark West Texas Intermediate oil future contracts for June delivery settled at US$11.57 per barrel, down US$8.86. With Monday’s decline, the price is down more than 57 per cent in just two days.

On Monday, the WTI contract for May delivery fell US$55.90 to US-$37.63 per barrel which means contract holders were paying others to take the oil off their hands. On Tuesday, contract expiration day, the amount returned to positive territory, settling at US$10.01.

Precision Drilling Corp. CEO Kevin Neveu says watching WTI fall negative for the first time in history on Monday was “shocking” for a longtime oil industry participant.

He added he expects spending on oil and gas exploration will fall even further from current, already-depressed levels because of the pricing signals.

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