Posted on 02/23/2015 9:39:52 AM PST by blam
Myles Udland
February 23, 2015
Manufacturing activity in Texas is plunging and the crash in oil prices is to blame.
The Dallas Fed's February manufacturing index fell to -11.2, down from -4.4 in January and well below the -4 reading that was expected.
Expectations were for the headline index to come in at -4.
In the last couple months, this report has been in focus as business owners in Texas take stock of how the decline in oil prices is weighing on that state's economy.
And Monday's report was no different.
One business executive in the primary metal manufacturing sector said that, "There has been a rapid decline in orders over the past 30 days, primarily in energy-related work. Overall, business has declined by 30 percent in the past month, and our forecasts, based on customer feedback and order volumes, indicate further decline in overall business."
A business leader in the machinery manufacturing sector said:
"Oil at $50 per barrel is painful. We laid off 25 percent of our workforce to match labor with demand. The current thinking is if we can get through the first half of 2015 unscathed, we will be okay in the second half. We're optimistic that things will be better in the second half of the year in the offshore energy market."
From the same sector, business executives said, "The oil price is driving down drilling activity in North America, and our business is strongly correlated to the number of active drilling rigs. We have a tough couple of quarters ahead."
(snip)
(Excerpt) Read more at businessinsider.com ...
What I’ve heard is that the Saudis are using the low oil prices to wipe out the US competition, which is subject to EPA regs that are killing them. Basically US oil companies are being pinched by the Obama regime that wants to destroy them via EPA regs (which would be a way of keeping the Trans-Canada pipeline from ever being able to be effective) and the Saudis who can offer much better rates for a LONG time if necessary, because they get to play by different rules.
Obama and the rich Islamists squeezing the life out of honest Americans. Who’da thunk it...
But now the relief that oil users are receiving is offset by the pain in the oil industry, I likewise do not expect the latter to be asking for my sympathy.
Gary Shilling is trying to get attention. Getting clicks on his articles is his motivation. $10 oil is not going to happen. There are others predicting $150. Neither is going to happen. The truth is somewhere between and most predictions are wild a$$ guesses.
In my lifetime, the big oil price jumps coincided with a bad economy (72, 79, 08)
Nobody is going to convince me that high priced energy is good for the USA.
It’s not. The EPA should not be crippling US producers’ ability to compete.
High energy prices are inflationary because they affect all economic sectors. If you’re part of the investment class or the energy sector, you want that inflation. The rest of us don’t get wage increases from high energy prices except as trickle down a year or two later.
Don’t hate the oil companies but I also don’t accept that what’s good for them is good for the rest of us.
When the EPA is brought to heel the price of oil will seek it’s natural competitive price. If that is ten dollars it will work ...if that is 100.00 dollars that will work....my guess is some where in between. Oil will be high as long as the democrat party has their way!!!
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