“At $45 a barrel, it shuts down nearly every project,” Steve J. McCoy, Latshaw Drilling’s director of business development, told Mr. Pruett and his guests. “The Saudis understand, and they are killing us.”
A Mexican restaurant has started a Sunday brunch to expand its revenues beyond dinner. A Mercedes dealer, anticipating reduced demand, is prepared to emphasize repairs and sales of used cars. And some well-off oil company managers are cutting back at home, rethinking their vacation plans and cutting the hours of their housemaids and gardeners.
More here, on the possible duration, at least related to China's economy:
"Heavy industrial overcapacity remains severe, and will take years, not quarters, to resolve. Generally, there is a large supply overhang problem which lower input prices cannot solve," wrote Brian Jackson, IHS Global Insight's China economist on Tuesday. "Most importantly, debt levels and shares continued to rise in 2014 – IHS estimates that China's debt-to-GDP ratio rose over 20 percentage points in 2014 to reach 247 percent."
And, there's also the issue of whether sagging stock prices couldn't force publicly traded companies into even further cuts.
Meanwhile, Texas Monthly is now weighing in, saying there's a fair possibility of a 1980s-style full oil bust.
Update, Jan. 27: The situation is of concern enough within the oil patch that pipeline companies are merging. And six-month business projections look weak.
Hedge funds, meanwhile, are betting on continuing price weakness.