The oil business has always been boom or bust. Nothing has changed.
For now, perhaps. How many of these have we seen in just our lifetimes? Unlike buggy whip making and elevator operation, these jobs will be back.
When this last happened at the height of the cold war in 1985, it followed a visit by then Vice President George H. W. Bush to Saudi Arabia. Bush convinced the Saudi royal family it was in their best interest to reduce the price of crude oil to regain market share. As a beneficial side effect, Russia lost a major source of foreign exchange. This followed a major investment by Russia in radar capability, which was largely negated by the publicity of the US then recently developed stealth technology. With reduced foreign exchange, Russia was unable to replicate the stealth technology and the Soviet Union failed. Unfortunately, the economies of the oil producing states, Texas among the most extreme example, were crippled.
This time around, Obama visited Saudi Arabia twice during 2014, Bidden called the Saudi royal family once and the UAE twice. This time it appears the primary objective is to cripple the oil producing states economies, principally Texas, which have been a thorn in Obama’s side. The beneficial side effects of reducing Russia’s foreign exchange, increasing Saudi market share, and reducing the foreign exchange of Iran, along with the positive effect on the economies of states more aligned with Obama, are perhaps just that, side effects.
By the way, crude prices dropped from a intra day high of about $32 in 1985 to a intra day low of $8 in 1986. That is a 75% drop. Prices did not return to $32 on a sustained basis until 2003. Based on that history, we may see oil prices as low as $25 and they may last for several years.
The good news, Texas recovered last time, and will this time as well.
Just watching local news about layoffs.
Gonna party like it’s 1986.
Number sounds low to me. Real low.
This is going to effect Red States and those States like Colorado we are trying to move Red.
Not a good thing.
There, fixed it fer yuh!
Regards,
Ping
#6 Halliburton’s energy industry operations have slowed down dramatically, so they gave pink slips to 1,000 workers last month.
Now It’s Halliburton’s Turn - Coming Workforce Reductions At Big Red Will Impact Thousands
http://www.freerepublic.com/focus/f-news/3248773/posts
1/20/2015
This comment suggests that the company could cut a further 6,000 jobs by March
BHP backing away from U.S. drilling
http://fuelfix.com/blog/2015/01/21/bhp-cuts-u-s-shale-spending/
Just months after BHP Billiton touted its results in U.S. shale, the Australian mining and oil company is making a big retreat.
The company will cut the number of rigs operating onshore in the U.S. from 26 to 16 by June 30, the end of its fiscal year, and will limit some of its activity in the Permian Basin and Eagle Ford to a level that it primarily uses to simply retain acreage.
BHP Billiton is one of the biggest international investors in U.S. shale, and it’s the fourth largest publicly-traded leaseholder in the Eagle Ford.