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When it comes to booms and busts, there's no industry more accustomed to riding them out than the oil industry. In fact, during bad times, big oil often gets even bigger. But during this pandemic, as NPR's Camila Domonoske reports, low oil prices come with new uncertainty.
(SOUNDBITE OF SONG, "...BABY ONE MORE TIME")
BRITNEY SPEARS: (Singing) Oh, baby, baby, how was I supposed to know?
CAMILA DOMONOSKE, BYLINE: Back in 1998 when Britney Spears had her first big hit, something wasn't right in the oil market. You might remember when gas dropped to about a dollar a gallon. The price of crude had collapsed.
GIANNA BERN: It was the lowest price - yeah - lowest price post-World War II.
DOMONOSKE: Gianna Bern is a professor at the University of Notre Dame. The oil industry used words like catastrophe. But every oil bust is also an opportunity. Merging is a way to cut costs, and strong companies can suddenly buy up their rivals for cheap. So in 1998...
(SOUNDBITE OF MONTAGE)
UNIDENTIFIED REPORTER #1: The proposed multibillion-dollar merger of Chevron and Texaco...
UNIDENTIFIED REPORTER #2: BP Amoco, as the new oil company will be called...
UNIDENTIFIED REPORTER #3: ExxonMobil would be, by most measures, the biggest corporation on Earth.
DOMONOSKE: That wave of megadeals reshaped the oil industry. Fast-forward to this April.
(SOUNDBITE OF SONG, "BLINDING LIGHTS")
THE WEEKND: (Singing) Sin City's cold and empty. No one's around to judge me.
DOMONOSKE: The Weeknd was at the top of the charts - streets empty, the economy in lockdown. In a few places, gasoline actually cost a dollar again. And oil plummeted like never before. CNBC was gobsmacked.
(SOUNDBITE OF MONTAGE)
MELISSA LEE: Minus $36 a barrel - yes, minus 36 bucks.
JIM IUORIO: That we got tankers of oil and no place to put them.
DOMONOSKE: It was the first time in history oil prices went negative. And while the market has recovered a lot, oil is still stuck at a pretty low price, and it's likely to stay there as the virus keeps the world from burning as much oil as usual.
Bernadette Johnson is the vice president of market intelligence at Enverus.
BERNADETTE JOHNSON: Air travel is definitely not recovered. Like, how many folks are driving to work again? There are some, but not the majority.
DOMONOSKE: The low price has already caused oil bankruptcies. And just like in 1998, this should be a prime opportunity to snap up rivals at bargain prices. A major wave of mergers could be coming, but there's no sign of it yet. And some experts aren't holding their breath.
MUQSIT ASHRAF: I do believe that the golden age of the megadeals in oil and gas may be gone.
DOMONOSKE: Muqsit Ashraf leads the energy practice for the consulting firm Accenture. He cites debt loads, skeptical investors and, above all, the pandemic. It's created so much uncertainty that companies aren't confident about trying to scale up.
ASHRAF: We may see an odd one here and there, but we should not expect a steady stream of blockbuster deals.
DOMONOSKE: There's a much larger uncertainty about the oil industry's future. Successfully fighting climate change would mean a shift away from fossil fuels. Carmakers are going electric, and renewable energy is on the rise. Now the pandemic is raising huge questions on an even shorter time frame. Will the current upheaval cause permanent changes to our behavior, to our economy?
David Dell'Osso is the chief operating officer of Parsley Energy, which is based in Austin. The company actually just finished merging with a rival before the crisis hit.
DAVID DELL'OSSO: I could not be happier about the fact that we're not having to try to absorb a company in the middle of a global health pandemic.
DOMONOSKE: Dell'Osso says operating on a larger scale has helped the company make money. And he says an oil bust like this typically separates viable companies from ones that can't cut it. But he also says this isn't a typical price crash.
DELL'OSSO: I mean, this is something that literally affects everybody in every country on the globe. And there's a lot that we don't know yet. But I think, you know, the whole - this time is different. I think this time it really is different.
DOMONOSKE: The oil industry has seen downturns before and come out stronger. But like the rest of us, it's never gone through something like this.
Camila Domonoske, NPR News.
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