Plummeting oil prices a bad thing?

[DG]

My brotheris fairly high up in BP and was explaining alot of it to me and from what I gathered. The north sea oil drilled by the uk costs around 40$ a barrel to drill, when prices get very low then its not worth the effort to drill it. At present Fracking which is the new thing costs around $80 to make and the Saudis and others in the OPEC cartel are worried about how much it will hit their econemy in the long run so they have pushed the price of oil down below fracking prices to drive the fracking companies out of business. The middle east can support the low prices at present but once the Frackers are out of business (unless the US goverment supports them) then prices will go back up. That's my understanding of it all. Oh and I think it only costs the Saudi's $12 a barrel to produce Oil.

[Laerrus]

True, but only small companies/self-employed contractors will get hurt in this. Major companies (Exxon, Shell, etc.) will lay off a few people here and there and rehire them later. The small companies will sell their wells to the bigger companies as it becomes too expensive to turn a profit. The large companies will hold onto that land until it's worth working on.

Even so, it will have a negative effect on local economies, especially in places where the petroleum industry is a major employer.

Houston, Texas is a prime example.

[Grummgug]

The problem is the #1 sector during the Obama Administration when it come to creating high-paying jobs was the oil industry. The shale boom was the only innovation to come down that created good jobs. Take that away and the economy is doing a lot worse. Outside of oil, the jobs we are creating are mostly part time or low wage jobs. We need a president and congress with a vision for creating high-paying jobs, and that means cutting regulations. But, our society to this point has focused more on punishing business, which is just cutting off your nose to spite your face. We need to realize we are all in this together and that Obama and the democrats are wrong to attack business at this time.

[Reeve]

Even so, it will have a negative effect on local economies, especially in places where the petroleum industry is a major employer.

Houston, Texas is a prime example.

Houston will get hit by this for sure. I was getting ready to buy a house before this happened. Now I'm going to wait. I read an article predicting a 12% decline in Houston housing prices before all this is over.

[Puremallace]

Should have specified. Everything I am reading seems to point toward a collapse or a major issue in the american economy. I could see how oil producing nations would suffer, but the USA?

Just for states who rely on oil income to balance their budgets. In Louisiana if we did not give away so many subsidies to corporations most people would give a shit. Right now every dollar it goes down cost the state 12,000,000.

Some dip shit in Baton Rouge based our budget on 100$ oil and now it is down to 50$. That is $600,000,000 and no way to bridge the gap because all the money has been given away.

[Reeve]

The problem is the #1 sector during the Obama Administration when it come to creating high-paying jobs was the oil industry. The shale boom was the only innovation to come down that created good jobs. Take that away and the economy is doing a lot worse. Outside of oil, the jobs we are creating are mostly part time or low wage jobs. We need a president and congress with a vision for creating high-paying jobs, and that means cutting regulations. But, our society to this point has focused more on punishing business, which is just cutting off your nose to spite your face. We need to realize we are all in this together and that Obama and the democrats are wrong to attack business at this time.

The stimulus provided by the lower oil prices should negate that effect somewhat.

[Puremallace]

We need a president and congress with a vision for creating high-paying jobs, and that means cutting regulations. But, our society to this point has focused more on punishing business, which is just cutting off your nose to spite your face. We need to realize we are all in this together and that Obama and the democrats are wrong to attack business at this time.

Dude you act like George Bush was not president like just 6 years ago. This shit does not remotely work and the only high paying jobs it creates on Wall Street as it destroys the low wealth classes. Take this ideology to Germany they will welcome you.

[obdigore]

My brotheris fairly high up in BP and was explaining alot of it to me and from what I gathered. The north sea oil drilled by the uk costs around 40$ a barrel to drill, when prices get very low then its not worth the effort to drill it. At present Fracking which is the new thing costs around $80 to make and the Saudis and others in the OPEC cartel are worried about how much it will hit their econemy in the long run so they have pushed the price of oil down below fracking prices to drive the fracking companies out of business. The middle east can support the low prices at present but once the Frackers are out of business (unless the US goverment supports them) then prices will go back up. That's my understanding of it all. Oh and I think it only costs the Saudi's $12 a barrel to produce Oil.

I know nothing of you or your brother, but this is what is happening.

OPEC is releasing their some of their massive stockpile of oil to drive the price down and attempt to kill fracking, since it generally costs a lot more for frackers to get a barrel then the wells. If they make it clear that they will do this any time fracking starts being profitable, it should prevent most businesses (and banks) from funding any fracking companies until OPEC is essentially out of oil.

The volatility of the oil market (and quite a few others) is related only to speculation.

[MMKing]

It's not that good news for Norway, we do have the ''Government Pension fund'' commonly referred to as ''The oil fund''. Which is valued at nearly 6 times the national budget, and about 1.75 times the national GDP. There are however 150-155 thousand people working in the oil industry, which is about 6-7% of the total population. Some ''states'' and counties however has 15-20% of the workforce in oil.

I however, quite enjoy 1,5USD (11.5 NOK) Per litre.

[stabetha]

The problem is the #1 sector during the Obama Administration when it come to creating high-paying jobs was the oil industry. The shale boom was the only innovation to come down that created good jobs. Take that away and the economy is doing a lot worse. Outside of oil, the jobs we are creating are mostly part time or low wage jobs. We need a president and congress with a vision for creating high-paying jobs, and that means cutting regulations. But, our society to this point has focused more on punishing business, which is just cutting off your nose to spite your face. We need to realize we are all in this together and that Obama and the democrats are wrong to attack business at this time.

someone is being critical of Obama quick someone bring up Bush

Dude you act like George Bush was not president like just 6 years ago. This shit does not remotely work and the only high paying jobs it creates on Wall Street as it destroys the low wealth classes. Take this ideology to Germany they will welcome you.

whew thank god crisis adverted.

[GennGreymane]

Just saying, Oil was doing alright only a few years ago when prices were even lower than this, JUST SAIYAN!

[Grimbold21]

I don't know about you fellows in the rest of Europe, but i ain't seeing such dramatic drops here in southern europe.

[Reeve]

I don't know about you fellows in the rest of Europe, but i ain't seeing such dramatic drops here in southern europe.

Probably because in most European countries a VERY large portion of the price of gasoline is taxes.

[Grimbold21]

Probably because in most European countries a VERY large portion of the price of gasoline is taxes.

I dunno the first thing about economy so yes. All the average joe cares about is seeing his expenses go down.

[DiscoGhost]

well its a world commodity. so you can almost view it as a global world currency value deflating. in all honesty though im laughing as the UAE market has went down 20% in the last couple months. i feast on their tears.

[Puremallace]

I don't know about you fellows in the rest of Europe, but i ain't seeing such dramatic drops here in southern europe.

Oil companies have been giving out a lot of money to stockholders. You could say their dividends have been OVER 9,000! There are a lot and I mean a lot of vested interest in making go back up as quickly as possible.

[Crackleslap]

I don't know about you fellows in the rest of Europe, but i ain't seeing such dramatic drops here in southern europe.

Definitely seeing dramatic drops in Australia.

Mid last year (2014) gas prices where like anywhere between $1.40-$1.60/L now it's only $1.18/L

It hasn't been this low in YEARS

[GennGreymane]

Nassau County NY: $2.50 per gallon

Its usually pricey around here too

[Crackleslap]

Nassau County NY: $2.50

Its usually pricey around here too

is that per gallon or litre?

[GennGreymane]

is that per gallon or litre?

In NY my apologies ill update so Gallon