DENVER - Those low gas prices may be nice now, but as the price of oil continues its free fall, the oil and gas industry continues to feel the pinch in Colorado.
The current price for a barrel of oil is at $30.
"This industry is very important to Colorado," said Stan Dempsey, spokesman for the Colorado Petroleum Association.
Oil and gas is estimated to be a $30 billion industry in Colorado.
According to the state, the oil industry has lost 6,200 jobs in Colorado since prices started to drop after Thanksgiving 2014. That’s nearly 20 percent of the state's oil and gas workforce, amounting to a 72 percent decrease in severance tax revenues.
"The wells that we're drilling, particularly in Weld County, and other parts of Colorado, are very, very productive,” said Dempsey.
On the upside, SUV and pick-up sales have increased as a result of lower gas prices.
According to sales tracker Autodata, SUV and pick-up sales are up 10 percent, while fuel-efficient cars have seen a decline in sales. Chevy Volt sales are down 23 percent and Toyota Prius sales are down 12 percent.
As for gas station owners and retailers, the news is also not all bad.
"It's not been a terrible thing," said Grier Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association. “It keeps operating costs lower. It keeps the credit card fees that we pay banks, lower."
Dempsey said low oil prices are related to supply and weak global demand, particularly from a slowdown in the Chinese economy.
OPEC and the Middle East are keeping production high. Some speculate it’s an effort to drive out U.S. and Russian oil producers. Dempsey said it’s likely because the Saudis and others are trying to keep their economies relevant, as production methods around the world become more efficient.
"They have economies that are less diversified," said Dempsey. "Their citizenry really depends on a strong oil market."
Analysts say gas prices will continue to drop over the next three months, then increase around Memorial Day as refineries ramp up summer blend production. Summer blends are more expensive to refine because they decrease emissions that contribute to unhealthy ozone and smog levels.