“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.”
That said, it's interesting, or rather, it's "interesting," to see that what would be called "capitalism" when practiced in the US by American companies is called "conspiracy" when practiced by KSA and Saudi Aramco.
American exceptionalism hypocrisy strikes again!
As for the actuality of concerns? Per my previous blog post on this subject, talking about the possibility of $40 oil, right now, West Texas Intermediate is hovering right around that $45 mark. I'm sure my blog's "man of the year," Saudi oil minister Ali Al-Naimi, is taking note.
Meanwhile, per that $40 blog post of mine, noting that Texas Comptroller Glenn Hegar probably hadn't looked too closely at ripple effects when issuing his report about state of Texas revenue for the 2015-16 biennium, the Times link at top reminds us of these ripple effects:
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.
Of course, Greg Abbott will soon tell us this is all Obama's fault, even as he prepares to launch his first suit as governor of the great state of all hat, no cattle miracles, or, as I call it, the Pointy Abandoned Object State™, surely getting ready to once again sue Barack Obama, aka Dear Leader.
Now, per the Times, and per Midland Mayor Jerry Morales, this is almost surely not going to be anywhere near as bad as the late 1990s. But, it could be about as bad, and for about as long, as the bubble-bursting at the start of the Great Recession.
More here, on the possible duration, at least related to China's economy:
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."
The latest on that end? Baker Hughes just announced 7,000 layoffs. And, it expects the second quarter of the year to be worse than the first quarter. And, it may close some facilities.
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.
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.
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