Posted on 12/16/2014 5:20:17 AM PST by thackney
The oil price crash could take thousands of good-paying jobs with it in America and around the world.
More cuts are almost certainly on their way.
On Monday, ConocoPhillips (COP) became the first major U.S. oil company to reveal that it is slashing spending for 2015, a decision the CEO asserted was "prudent given the current environment."
Bad news already started to flow this week: Halliburton (HAL) affirmed that it plans to cut 1,000 positions due to the depressed oil market, and BP (BP) announced an unspecified number of layoffs as part of a $1 billion restructuring plan.
It's true the job losses aren't widespread yet. Oil would have to fall a lot further for many energy companies to become unprofitable. And economists say cheap gas is akin to a $60 billion gas cut to consumers.
But there are reasons to worry. The U.S. shale oil boom has become such a key driver of the economy in recent years, creating well-paying jobs at a time when other industries were scaling back.
According to Fatima Iqbal of Azzad Asset Management, over 15% of total employment gains since the beginning of 2008 have come from the energy industry, even though it is less than 1% of the country's job base.
(Excerpt) Read more at money.cnn.com ...
Us? No.
But Pre-WWII Germany, Russia, Japan...........definitely yes...............
But, those who lose their jobs will save 33% at the pumps!
Hi.
I hoped you’d be here.
:)
/stalk
Is it just the Saudis that have caused this oil price tumble due to their increasing quantity they deliver? Or did they just moved a little which kick us over some tipping point?
Layoffs and downturns are the way of life more magnified in the Oil Patch, due in no small part to slow response when energy tipping points are inevitably reached.
So, the objective is to bankrupt middle class America with exorbitant oil prices in order to keep oil industry workers working? That sounds like robbing Peter to pay Tyrone.
Probably true, but what kinds of jobs with the cheap energy create? More service jobs or real industry with a future? And where? In China, Vietnam, Philippines?
I see this benefitting developing countries more so than Western ones. So yes, more jobs but potentially not high paying jobs and not here. Most of our big manufacturers already operate out of other countries.
Saudi's have not increased their oil production. The increase in supply is from the US and some from Canada. No others are significant increases.
Stating the partial cause of the lower prices is not the same as claiming the higher prices are needed.
Thanks for links and info! “Fracking” has brought jobs and $$ to Pennsylvania. In particular, NE part of State. Susquehanna/Bradford Counties have benefitted tremendously from Natural Gas. I think what most want is price stability....Not sure where the price floor is.
You'll have to chose between the two, because it's unlikely you can have both at once.
Like electricity, foods are produced nearer the source of the raw ingredients, corn fed beef in the Midwest for example, near where the corn is grown for example.
I am going to guess that currency is losing value and business surpluses get taxed or otherwise lost.
That being the case, then this is no more than normal Oil Patch Boom and Bust, supply and demand.
Pretty much, combined with some panic traders. IMO
We are talking strictly oil, not gas, right? With all the shuffling about on LNG exports, NG should remain viable and outside the bust.
The LNG exports are not here yet. One to start next year I think, other years after. So the don’t have much impact to the market yet.
bkmk
“But the supply of oil is growing faster than the demand.”
There’s a couple of 20 inch pipelines fixing to open early next year and just the fill alone will take several million barrels and it’s going to take awhile to do it. That will make a dent in the surplus. If I remember right it took the Alaskan pipeline a year to a year and a half to fill.
“So, the objective is to bankrupt middle class America with exorbitant oil prices in order to keep oil industry workers working? That sounds like robbing Peter to pay Tyrone.”
There are 39 oil producing states that employ millions of people either directly or indirectly through various services. The severance taxes that each state receives will be and are already being cut dramatically meaning they will have to make up that revenue someplace else by raising taxes. Where do you think that’s going to come from? Those employed in the business are about as middle class as it gets. For your comment to be true one would have to believe they’re trying to bankrupt themselves. Demand sets the price of oil not the oil companies, we have no control over the price.
“Pretty much, combined with some panic traders. IMO”
The market always over reacts.
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