NEW YORK (TheStreet) -- Oil prices were retreating in late afternoon trading on Friday, as the oil rig count rose by 9 to 450 rigs this week, according to the latest report from Baker Hughes. (BHI) This was the 20th rise in oil rigs in the past 23 weeks, but the count is down by 122 rigs from one year ago.
Oil bulls should be "scared to death" right now, UCX founder Jack Bouroudjian said on CNBC's "Power Lunch" Friday afternoon.
Besides the build in oil rigs this week, the U.S. crude oil stockpiles rose by more than 14 million barrels last week, he noted. This was the biggest rise on record, yet it happened during a month where we saw record exports.
This shows that with technology, the cost of fracking and producing oil in the U.S. has become "much cheaper," he said. But while producing a barrel of oil is "cheaper than ever before," oil worker salaries are coming down, he noted.
The "real concern" with the price drop is the damage it does to oil services and oil workers, he explained.
Going forward, the question is whether the "velocity" of the move down in oil prices will continue, Bouroudjian said. If it's a gradual move down, then "we'll be okay," he said. Crude oil prices dropped by more than 9% this week.
Oil prices will continue to drop to $35 per barrel, according to Bouroudjian.