As seen by readers:- Oil at $40 by the end of the month?
- The media finally catches on to the fact that Dubai was a mania of nightmarish proportions.
BTW, fellow Houstonians. A family member who is pretty high up in the food chain says that the oilfield service companies are gearing up for layoffs. Heads will be rolling as of next month.
I am certain that as these vital companies shed workers and struggle to stay afloat, Congress will want to help them. Right?
4 comments:
I hate the idea of tens of thousands of fellow Houstonians losing their jobs, but I saw it happen when I was in high school and I fear that it's about to happen again. However, I do think that this time around engineers and petroleum geologists won't be tossed overboard with such gusto.
What!? We're family?
"The guys to be worried about are the field services companies and small independent oil companies. They bet their short term future on high oil prices. They'll bear the brunt of this. Be prepared to see Christmas time layoffs in this group."
November 20, 2008 8:25 PM
All joking aside, I hope your family member is right and they wait until January. Any prices below $40/bbl are a short term phenomenon. Just as the price was overbid a few months ago, it will be underbid until the panic subsides.
When oil prices collapse, petro-states react in the short term by raising production (trying to maintain revenue). But unlike earlier busts, there is little spare capacity now to pump more oil. That means the supply will remain relatively flat, and the price should bottom out and recover earlier.
Unless, of course, the recession deepens and demand falls further.
Any prices below $40/bbl are a short term phenomenon. Just as the price was overbid a few months ago, it will be underbid until the panic subsides.
Well, from a purely local selfish standpoint I hope that you are right.
You're a dangerous person to gainsay of late, Lou, but I don't think he'll be shot (though I'm a bit embarrased at how delightful I find that prospect). Venezuela hasn't had that particular tradition since well before Caldera that I recall, plus Chavez has had plenty of time to stack the military, Congress, Supreme Court, all bureaucracies, nationalized companies, etc, with his stooges, all of whom would stand to lose almost as much as Chavez should he be deposed. That means that most of the decision-makers and power-weilders in Venezuela stand as obstacles to a violent overthrow.
I can see his chances of re-election fading dramatically should the free-fall of oil continue. And should Chavez engage in even more overtly despotic power to prevent that loss from happening, then all bets are off.
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