good new, bad news

[LCHIEN]

You all may be celebrating low gasoline prices that are dipping below $2 in many places. In many ways it will be a stimulant for the economy.

But in Houston, Texas and other energy cities, this is going to lead to massive layoffs in the oil and gas companies, service companies and suppliers to the service companies. There's a strong possibility of thousands of layoffs coming this year as exploration budgets are slashed in half at many companies.

I've seen this happen at least twice before (and been laid off twice) and it never looked quite so bleak. A barrel of oil now sells for half of what it did about 6 months ago. The rate of decline is unprecedented.

Anyway, Have a Merry Christmas and enjoy the low prices while you can.

[woodturner]

You all may be celebrating low gasoline prices that are dipping below $2 in many places. In many ways it will be a stimulant for the economy.

.....

I've seen this happen at least twice before (and been laid off twice) and it never looked quite so bleak. A barrel of oil now sells for half of what it did about 6 months ago. The rate of decline is unprecedented.

I feel your pain and concern, have "been there done that" but in different industries. As they say, the only thing constant is change. It seems some industry is always declining while some other is growing.

I've found it helpful in these situations to view it as a "good ride while it lasted".

In this part of the country, the declining oil prices have essentially put the fracking operations out of business, due to the higher extraction costs. Some have suggested that is the point, that foreign oil producers are keeping prices low to inhibit development and progress in alternative extraction methods like fracking.

I don't know how long you have been in the industry, but recall that in the early 1980's Houston was not the place to be - people were walking away from homes, huge homes were selling for $20K if they sold at all, builders were buying out loans and defaulting, etc. Does it seem worse now than then? Back then people were saying it would take a decade or more for Houston to recover, and some speculated Houston would become a ghost town.

Anyway, I hope it works out for you.

[Neal]

In my neck of the woods (SE Ohio, North Central WV) the oil and gas boom has been a significant driver of economic development in the past few years. The Marcellus and Utica Shale formations have had a significant economic impact all over our little corner of the country.

We have seen the construction and opening of a dozen hotels, A small boom in the housing and rental markets, Restaurants are busy again, the streets are more crowded, new businesses are popping up all around us, other businesses are having better years.

While lower gasoline prices are good for a large majority of the country and world, the lower oil prices will be felt negatively in my neck of the woods as well.

Merry Christmas to all.

[durango dude]

well - I lived and worked in the muddle east for four years when the petro prices were above $100/bl.

What I'm seeing over there now is companies compensating for price with volume.

The output is really wild ----- which keeps the delivery side of the business really busy. (the current global output is about double what world-wide demand is). This will also keep the bunkering business pretty brisk --- so if you happen to own an empty tanker ship --- you're in luck.

With low prices - you are most likely to see reductions in administration and exploration.

[capncarl]

I hate it that our citizens will loose jobs. I heard an interesting theory one time that I like to use. When we are burning Mid East oil we are reserving our oil for future use when times are not so good politically. Use their oil up first because not of it is an endless well.
capncarl

[JimD]

Probably not a good time to be a chemical engineer. It's a tough degree to get and the boom/bust cycle of the petrochemical industry tends to drive the employment picture. There are chemical engineers outside of this industry, of course, but when one large user is not interested in hiring, may be laying off, it tends to affect salaries, when you can find a job.

[LCHIEN]

Probably not a good time to be a chemical engineer. It's a tough degree to get and the boom/bust cycle of the petrochemical industry tends to drive the employment picture. There are chemical engineers outside of this industry, of course, but when one large user is not interested in hiring, may be laying off, it tends to affect salaries, when you can find a job.

probably a good time to be a chemical engineer.

Good times are to be had when your raw materials are cheap and plentiful

Bad times are when your product prices are low with lots of competition.

Chemical engineers fall in the first category.
Petroleum engineers fall in the second category.

Chemical engineers are the ones who take raw materials like oil and make other products like fertilizers, plastics or gasolines and fuels from it.

Petroleum engineers are the ones who find, separate, and produce oil and gas. They decide where to drill, what techniques to use to produce the oil and how to bring it to market.

[Hellrazor]

The thing to watch is whether Russia can hold things together since the oil price crash has pretty much killed their economy. The market will go crazy if another Euro gov has money issues. Surely one that size.