HOUSTON - Fears over the COVID-19 Coronavirus and plummeting oil prices triggered the first automatic halt in trading on the stock market in more than 20 years Monday.
The trading halt lasted roughly 15 minutes.
As the energy capital of the world, Houston is one of the hardest hit by today's news.
Each of the three major indices dropped more than seven percent, with the Dow shedding more than 2,000 points.
The result? On one hand, drivers are enjoying low gas prices. On the other, thousands of people who work in Houston's oil and gas industry are worried they could lose their jobs.
While drivers enjoy cheaper prices at the gas pump, oil prices dropped more than 20 percent - the biggest plunge since the 1991 Gulf War.
“I love it because you can get a full tank for like a couple of dollars,” said Shekira Smith.
It used to be way more to fill up my tank,” said Victori Robles.
As the COVID-19 has spread from China to the U.S. and countries around the world, gas consumption is dropping fast.
Andy Lipow, President of energy consultancy Lipow Oil Associates LLC said Monday’s drop could have crippling effects on the economy.
Lipow attributes the massive dip to global fears over the Coronavirus, Saudi Arabia and Russia's dispute over production this weekend.
"The Coronavirus has resulted in demand destruction first happening in China, now in northwest Europe, as well as in the U.S. And on Friday, members of OPEC met to decide how they were going to cope with this demand destruction. What they decided is they couldn't come to an agreement and as a result, we now have a price war with sinking oil prices," Andy Lipow with Lipow Oil Associates explains.
There's some good news. You'll pay less at the pump for a while.
"Here in Texas, which leads the country in the lowest gasoline prices, we should expect to see $1.99 as the statewide average really sometime next week," said Lipow.
But hundreds of thousands of Houstonians work for oil and gas companies based here, or for manufacturing jobs tied to oil and gas. As those companies are pinched by low oil prices, Lipow says thousands could lose their jobs.
"I think if you're an employee of a production company, you're quite concerned that $35 oil is just not enough to sustain production out in the Permian Basin, as well as those service providers, such as Haliburton and Schlumberger, that are helping to support getting the oil out of the ground," said Lipow.
But for people with investments in oil and gas, Lipow says long term investors can stay the course.
"If your time frame is several years, then I would suggest that you stick with your stocks. Over time, oil production and oil demand is going to be rising over the next five to ten years," he said.
How long the economic impact could last depends on when COVID-19 cases peak. A survey by Evercore ISI Research found 80% of investors expect supply chains from China to return nearly back to normal by July.