It means cheap petroleum products for the near future and lots of layoffs in the oil industry.
I have seen this cycle many times.
I have seen this cycle many times.
Me too. However, this time might be different. We might need that petro, and more, soon.
As you know it is not just Texas now. North Dakota and Alberta are huge oil producing areas too. It has a tremendous trickle down effect throughout all the industries that service the energy exploration sector.
I am a lumber broker. All the British Columbia sawmills produce 2x8 #2&btr Rough sawn Green Douglas Fir/Larch that goes to ACESS MATTING producers. This is one of their main target products being cut from larger diameter timber. If there is no drilling then there is not need for this product.
Other sawmills in the USA makes these 2x8 in Red Oak. They are used to get to drilling sights in swampy areas. Hence, they are also called swamp mats.
In addition there companies that cut 6” timbers for drilling mats. Same idea, but not as much volume.
Another factor in my business is the construction of Man Camp portable buildings. These were used extensively in Alberta, North Dakota and Texas in the last ten years. Some manufactured housing companies did this almost exclusively during and right after the Great Recession. Stop drilling and you stop the need for temporary housing for oil workers.
I am sure you can name dozens of other items/industries that the layman person has no idea about the effect that Cheap oil has.
Western Canadian crude is bringing $.86/bbl.
We need an import tariff on crude oil now to protect those jobs!!!