Great for consumer, horrible for producer

[Be_Original]

How many of you that work in the oil and gas industry have been affected by oil prices decreasing? I have only been in the industry through a service company for three years and have never seen my share of oil prices dropping. Lay offs, cutting hours, cutting day rates and multiple other actions have taken place. What worries me is not getting laid off, it's the long term effect of possibly thousands more being laid off and competing in the job market with no college degree?

What's your story?
What are your plans if things go south?

Thanks

 

[nevada]

How many of you that work in the oil and gas industry have been affected by oil prices decreasing? I have only been in the industry through a service company for three years and have never seen my share of oil prices dropping. Lay offs, cutting hours, cutting day rates and multiple other actions have taken place. What worries me is not getting laid off, it's the long term effect of possibly thousands more being laid off and competing in the job market with no college degree?

What's your story?
What are your plans if things go south?

Thanks

wouldn't a lower price mean more people will be buying? why would this cause layoffs and slow downs?

also, where were all these people several years ago when the price was close to what is it NOW? were they not working there THEN?
am I supposed to believe that when the price went UP, and people started buying LESS, that the company had to hire MORE people?

 

[cjacob316]

How many of you that work in the oil and gas industry have been affected by oil prices decreasing? I have only been in the industry through a service company for three years and have never seen my share of oil prices dropping. Lay offs, cutting hours, cutting day rates and multiple other actions have taken place. What worries me is not getting laid off, it's the long term effect of possibly thousands more being laid off and competing in the job market with no college degree?

What's your story?
What are your plans if things go south?

Thanks

I went to school with plans to go in to oil and gas, when I started price per barrel was at an all time high and it just kept getting better. Then we had an oil spill and a new president (who seemed to want to be rid of gas by the end of his term) and I saw the writing on the wall. Instead of taking the big money out of college with the fear of losing my job by now because of the inevitable crash, I went into the restaurant business with my father (who has been doing that since he was young) and we own a franchise. Yes the restaurant industry can be fickle, but getting into the right brand and running it correctly can be very profitable and stable.

 

[cjacob316]

wouldn't a lower price mean more people will be buying? why would this cause layoffs and slow downs?

also, where were all these people several years ago when the price was close to what is it NOW? were they not working there THEN?
am I supposed to believe that when the price went UP, and people started buying LESS, that the company had to hire MORE people?

You really think people decided to buy less gas because it was expensive? When prices were going up there were more drivers on the road than ever before, SUV's and big trucks were trending up, people were actually commuting longer distances to work because houses were getting cheaper in the suburbs. People don't stop driving to work because of gas prices. It was also driven by an increase in American oil production, more Americans had jobs because we were drilling oil. This drop is being fueled by a flood of oil from opec intentionally trying to drive the cost of oil down. American companies are making less money now so they have to lay off to protect the bottom line.

 

[Be_Original]

Nevada

I believe this is a very common misinterpretation. (Someone please correct me if I am wrong) I am no news reporter or analyst but from what I gathered the middle east has forced the oil price per barrel to decrease due to high production at low costs to the producer, compared to here in the US where the production is a fraction of that in the middle east at higher costs to the producer. It no longer becomes profitable to a company when x amount of money is spent to drill, complete and produce when much less will be made when it is sold. Factors such as wages and the formations that are being drilled in the middle east are two of many factors that I believe hinder our production. Supply is high and demand has remained the same, it makes no difference for them to sell at such a low cost...even at 20 dollars a barrel

 

[progress4m]

How many of you that work in the oil and gas industry have been affected by oil prices decreasing? I have only been in the industry through a service company for three years and have never seen my share of oil prices dropping. Lay offs, cutting hours, cutting day rates and multiple other actions have taken place. What worries me is not getting laid off, it's the long term effect of possibly thousands more being laid off and competing in the job market with no college degree?

What's your story?
What are your plans if things go south?

Thanks

I totally understand your worries…

Historically oil prices were cyclical, obviously so is oil and gas industry … the last cycle (upswing) was the longest (essentially since late 90- 1998-1999) with exception of the small drop following 2008 economy crash (not related to oil industry by itself); prior to that oil prices would stay up for about 7 years on the average and then it would drop;

So if you count 2008-2009 oil price drop then 7 years cycle is still valid…
I have been employed by oil service company for the 18 years now… so I am going to hang around as long as I can (as long as the door is open and they need me)…

IMO: Current oil drop can be solely attributed to Saudi Arabia’s attempt to force none OPEC country’s (Venezuela, Russia, North Africa) to join OPEC (or to kill their economy and therefore removed them from the oil market)… so the oil prices can be controlled by OPEC in the future…

 

[Be_Original]

CJacob

Its safe to say that every business has its ups and downs, but the oil and gas industry is certainly a gamble. Of all the articles I have read regarding oil price predictions in the near future there is no solid answer, only time will tell. Had I not ran out of finances when going to community college I could have attained a bachelors degree in business but the money of the oil and gas industry lured me in.
Natural gas and renewable energy spark my interest for a new career.

 

[cjacob316]

Nevada

I believe this is a very common misinterpretation. (Someone please correct me if I am wrong) I am no news reporter or analyst but from what I gathered the middle east has forced the oil price per barrel to decrease due to high production at low costs to the producer, compared to here in the US where the production is a fraction of that in the middle east at higher costs to the producer. It no longer becomes profitable to a company when x amount of money is spent to drill, complete and produce when much less will be made when it is sold. Factors such as wages and the formations that are being drilled in the middle east are two of many factors that I believe hinder our production. Supply is high and demand has remained the same, it makes no difference for them to sell at such a low cost...even at 20 dollars a barrel

The difference is the drop in price in fueled by an intentional over production of oil in the middle east, flooding the market causing American oil production to slow. The oil companies here are losing money they aren't making money.

 

[Matt007b]

I'm not an expert or know it all but this is my thoughts on this.....:ranger:

The saudi's/OPEC were enjoying $140 a barrell oil.. but then American oil companies started figuring out how to get shale oil and fracking.. the price of oil started to go down a little but US companies started making mass $$$

So normally OPEC would cut production and raise the price of oil hitting the consumer at the pump and slowing down demand but..now the Saudi's are doing something unique and being the rebel vs. OPEC.. they're flooding the market with cheap oil (which is easier to get vs. US companies..) and their goal is to kill off US companies or least hurt them pretty hard because their oil is way cheaper to produce than ours..

now the price is tanking - US drillers/investors are not exploring and everything is on hold :fear:.. it's almost like they're playing chicken to see who can hold out the longest without making money (although I bet the Saudi's are still making money..) so Texas/North Dakota.. gulf states/US oil companies are in for a tough ride here... that's why you could see heavy layoffs here at home although I think the economy is really going to get strong if it gets cheaper.

Short term I think it's going lower..long long term someone will cave in and it'll zoom right back up and then everyone will be crying - probably after the US oil companies take a serious hit which is what they/saudi arabia wants.. I'd be nervous if I was in your shoes - hopefully you're in a 'needed' position.. but long term it will go up (it always has.. but when who knows..)

 

[nevada]

You really think people decided to buy less gas because it was expensive? When prices were going up there were more drivers on the road than ever before, SUV's and big trucks were trending up, people were actually commuting longer distances to work because houses were getting cheaper in the suburbs. People don't stop driving to work because of gas prices. It was also driven by an increase in American oil production, more Americans had jobs because we were drilling oil. This drop is being fueled by a flood of oil from opec intentionally trying to drive the cost of oil down. American companies are making less money now so they have to lay off to protect the bottom line.

yes, people had to get to work still.
but I absolutely believe people drive less when fuel prices are high. they do less of everything else also.

some people choose public transportation, some chose other forms, maybe even carpool. but they travelled LESS in their free time as well. high gas prices kill our economy across the board.

 

[progress4m]

wouldn't a lower price mean more people will be buying? why would this cause layoffs and slow downs?

also, where were all these people several years ago when the price was close to what is it NOW? were they not working there THEN?
am I supposed to believe that when the price went UP, and people started buying LESS, that the company had to hire MORE people?

Keep in mind that increase in consumption of gasoline when gas is cheap cannot compensate for reduced oil production- that relation is not linear…

So in essence: when oil price are low, to the point that oil company cannot be profitable to service wells and produce oil (currently getting very close that price point: around $45.00), then oil company will try to reduce cost and spending: laying off employees, stop spending on the research and development of new technologies, killing new projects, etc…

 

[cjacob316]

CJacob

Its safe to say that every business has its ups and downs, but the oil and gas industry is certainly a gamble. Of all the articles I have read regarding oil price predictions in the near future there is no solid answer, only time will tell. Had I not ran out of finances when going to community college I could have attained a bachelors degree in business but the money of the oil and gas industry lured me in.
Natural gas and renewable energy spark my interest for a new career.

Yes but people will always eat. The trend though is to get as far away from fuel as possible and the push to do it rapidly is greater than ever. You know how people complain about toyota not making a diesel for the American market? I think it's obvious the direction Toyota is going in the American market, developing the Hybrid and now the Hydrogen cell. They know that America is moving towards a cleaner future and the money is in less fuel, not diesel.

 

[Be_Original]

Matt

I can confidently say that I am essential and needed at my office with the position and title I hold, but its always smart to have a plan B especially with a stay at home mom/wife and 6 month old.

It just baffles me how so many around here praise the low gas prices but don't understand how it is affecting the economy.

 

[cjacob316]

yes, people had to get to work still.
but I absolutely believe people drive less when fuel prices are high. they do less of everything else also.

some people choose public transportation, some chose other forms, maybe even carpool. but they travelled LESS in their free time as well. high gas prices kill our economy across the board.

That is not true. With the migration to suburbs, public transportation and carpooling is more difficult. I grew up in metro Atlanta. No one near us worked close enough to either of my parents to car pool. With the population spreading out, the chances of living close enough to someone that you work close enough to to car pool are low. My county would not allow Atlanta's public transportation to come in to the county, yet we were the largest suburb of Atlanta. But what you fail to see is that it's not American Oil companies selling all this "extra" gas you think people are buying. This is all being driven by OPEC. Oil production in America is down because of this and therefore the people who work in oil production in this country simply are not needed.

Also the oil and gas industry provides some of the highest paying non college degree jobs in the country, heck higher paying than a lot of people who have degrees. If you think that having thousands of highly paid middle class people out of work helps the economy, you're sadly mistaken. Oil Drives the economy all over the world. the amount of gas it takes to get to work or go to the store does not change, yeah you might have a few extra bucks in your pocket, but responsible people budget everything and extra money doesn't change their spending habits, it stays in their accounts until something happens that forces them to spend more money. Something like losing your job because the restaurant you work at hired extra staff to be able to serve the 200+ oil field workers than came in because of the new local drilling going on, but now that those 200 oil workers lost their jobs, the restaurant doesn't need the extra help anymore, and it just keeps going and going

 

[nevada]

Matt

I can confidently say that I am essential and needed at my office with the position and title I hold, but its always smart to have a plan B especially with a stay at home mom/wife and 6 month old.

It just baffles me how so many around here praise the low gas prices but don't understand how it is affecting the economy.

low gas prices are better for the economy. short term it may sting a bit, but long term its better.
sadly, there wont be a LONG TERM, because that shit will go up again, and everything ELSE will tank again when it does.

 

[Cory619]

Don't worry. Thanks to the lower gas prices, politicians are seeing a way to generate tax revenue.

Standby for $5.00 plus gallons of gas.

 

[nevada]

That is not true. With the migration to suburbs, public transportation and carpooling is more difficult. I grew up in metro Atlanta. No one near us worked close enough to either of my parents to car pool. With the population spreading out, the chances of living close enough to someone that you work close enough to to car pool are low. My county would not allow Atlanta's public transportation to come in to the county, yet we were the largest suburb of Atlanta. But what you fail to see is that it's not American Oil companies selling all this "extra" gas you think people are buying. This is all being driven by OPEC. Oil production in America is down because of this and therefore the people who work in oil production in this country simply are not needed.

maybe right where you live its not true, but across the nation. are you telling me nobody drove less, or chose alternate means of travel?

in my business, the higher the gas prices, the less we do. people just will NOT spend money on anything else, because they are spending it all on fuel.


that is a different issue, other than just "cheap gas" if out government is stupid, that's something else.

 

[Matt007b]

Matt

I can confidently say that I am essential and needed at my office with the position and title I hold, but its always smart to have a plan B especially with a stay at home mom/wife and 6 month old.

It just baffles me how so many around here praise the low gas prices but don't understand how it is affecting the economy.

Glad you're going to be ok - scary times for a bunch of people, but hopefully your company rides it out. Honestly if I had $$ laying around it might be a good time to buy oil stocks and such... risky gamble but knowing the history of oil it'll go up.. good luck!

 

[Be_Original]

Fill me in when you say everything else will tank. Monthly expenses (fuel) will go up for families and businesses, but I don't see high gas prices hurting the working class.

Look at airline industries for example. Their ticket prices fluctuate according to gas prices, they compensate for gas price in their ticket price and not laying off employees.

 

[cjacob316]

18.4 cents per gallon is federal taxes regardless of the price. then each state has a tax has well. The cost of shipping the fuel is also passed on to you too, oh yeah let's not forget about the truck drivers who usually transport fuel getting paid less or losing their jobs because the prices are down. There is much more of a trickle affect that negatively effects the economy than you realize.