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Low Oil Prices Are "Unequivocally" Bad For 756 US Steel Workers, 2 Plants Idled

Tyler Durden's picture




 

Citing "softening market conditions influenced by oil," US Steel has issued lay-off warnings to 756 workers in the US... Layoffs will begin in early March as both Ohio and Texas plants will be idled.

Via Bloomberg,

  • *U.S. STEEL SAYS 756 WORKERS GOT WARN NOTICES
  • *U.S. STEEL SAYS 614 WORKERS AT LORAIN TUBE PLANT, OHIO
  • *U.S. STEEL SAYS 142 WORKERS AT TEXAS PLANT
  • *U.S. STEEL CITES SOFTENING MARKET CONDITIONS INFLEUCNED BY OIL
  • *U.S. STEEL SAYS LAYOFFS TO BEGIN EARLY MARCH
  • *U.S. STEEL SAYS BOTH PLANTS WILL BE TEMPORARILY IDLED

Where's Larry Kudlow? But what about the lower costs? What about the "unequivocally good" meme?

 

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Tue, 01/06/2015 - 10:53 | 5627702 Headbanger
Headbanger's picture

Keystone Pipeline gets passed ASAP

And how about some high speed rail projects?

Or just fix some bridges.

 

Tue, 01/06/2015 - 10:52 | 5627709 LawsofPhysics
LawsofPhysics's picture

...and promptly vetoed by Obama/Buffet...

Tue, 01/06/2015 - 10:58 | 5627729 Richard Chesler
Richard Chesler's picture

Bring those oil speculators back in!

 

Tue, 01/06/2015 - 11:00 | 5627738 LawsofPhysics
LawsofPhysics's picture

Ahh yes, return of the "evil speculators"...

 

LMFAO!!!!

Tue, 01/06/2015 - 11:05 | 5627756 Headbanger
Tue, 01/06/2015 - 11:11 | 5627783 EscapeKey
EscapeKey's picture

"plunge"

it's an 0.5% move, at best.

Tue, 01/06/2015 - 12:05 | 5628022 cdevidal
cdevidal's picture

When you follow markets the words are always "plunged!!" and "soared!!!!!!!!!1". No moderate moves allowed.

Tue, 01/06/2015 - 13:39 | 5628609 847328_3527
847328_3527's picture

Any moment now Putin will be on his knees begging for mercy as Barry's strategy of low oil prices crush the Russian economy....

 

oh, wait a sec....

Tue, 01/06/2015 - 10:59 | 5627731 fzrkid
fzrkid's picture

sure, just print more money to pay for it

Tue, 01/06/2015 - 11:16 | 5627799 zappafan
zappafan's picture

Quiz time!

 

Building a pipeline to transport crude oil that costs $80-100/barrel to extract when you can only sell it for $40/barrel makes as much sense as:

 

1. A date with Hillary Clinton

2. Throwing a stack of $100 bills into a furnace just for grins and giggles

3. Hacking your own balls off with a machete

4. All of the above

Tue, 01/06/2015 - 12:05 | 5628020 1000yrdstare
1000yrdstare's picture

Can I hack my balls off before I go on the date with Hillary?

 

(just in case in case I want a little touchy feely, pokey squeely...)

 

(sarc needed?)

Tue, 01/06/2015 - 11:28 | 5627857 silverer
silverer's picture

Yes. What to think of the Keystone Pipeline? I'm wondering what the production cost per barrel would be for what would come down the pipeline. Maybe they could build a really cool bicycle path on top of the pipeline after that gets shut down.

Tue, 01/06/2015 - 10:52 | 5627706 LawsofPhysics
LawsofPhysics's picture

Look "folks", the very fact that CONgress has to actually hold a vote in order to not get an automatic increase in pay should tell everyone that we have passed the event horizan a long time ago.

 

Tue, 01/06/2015 - 11:33 | 5627877 bmr22
bmr22's picture

So sad, so funny and yet so true

Tue, 01/06/2015 - 10:53 | 5627707 pods
pods's picture

Well, if anyone ever wanted to know what it felt like to be in a submarine way below crush depth we will soon find out.

pods

Tue, 01/06/2015 - 10:54 | 5627716 q99x2
q99x2's picture

Bankers stole my entire hometown pf Pittsburgh as one of their earliest crimes. Here it seems like the fracking business may not be a good idea to begin with; merely a mechanism for Goldman Sachs able to con investors out of.money.

Tue, 01/06/2015 - 11:08 | 5627771 EscapeKey
EscapeKey's picture

Goldman combines their experience with your money, and makes it their money and your experience.

Tue, 01/06/2015 - 11:44 | 5627927 GRDguy
GRDguy's picture

Wealth Management actually means they manage your money for their wealth.

Tue, 01/06/2015 - 10:56 | 5627721 BlackSwanOil
BlackSwanOil's picture

The Oil Punge is spreading out.  People will continue to be shocked.  They have been warned.  Looks like lots of pain on the way.

Tue, 01/06/2015 - 11:00 | 5627743 Son of Captain Nemo
Son of Captain Nemo's picture

Only "756 Steel workers"???... BWA HA HA HA HA... HA HA HA...!!!

Oh that's right!...

We keep forgetting that India and China make all our steel now since we off-shored all of those remaining jobs along with IT after 9/11!

Should get real interesting when the two countries with the largest reserves of our currency along with the factories that make the components for our "war stuff" are being threatened with attacks for not being compliant when we want to go to war with their trading partner?!!

Tue, 01/06/2015 - 11:05 | 5627760 LawsofPhysics
LawsofPhysics's picture

Yep, trade is the only thing that keep the world from going to war in earnest.

What do all those SNAP babies provide/create that is of real value to the rest

of the world?

Show me the real liabilities on the balance sheet of the U.S.S.A.!!!

tick tock motherfuckers.

Tue, 01/06/2015 - 11:05 | 5627761 Winston Churchill
Winston Churchill's picture

At least we can send OSHA and the EPA to war.

We will stangle the BRIICTS with red tape.

Tue, 01/06/2015 - 11:08 | 5627770 LawsofPhysics
LawsofPhysics's picture

I do business in Brazil, you have no fucking idea.

Brazil is not part of many of the same trade agreements.

Anytime something is re-negotiated I have to send someone to the nearest Brazilian consulate for a $20.00 notorization.

Fucking stupid.

Tue, 01/06/2015 - 11:15 | 5627804 Winston Churchill
Winston Churchill's picture

You should have tried doing biz in India or Africa when I did.

Much easier to just bribe a local to get her done.

Tue, 01/06/2015 - 11:28 | 5627851 free_as_in_beer
free_as_in_beer's picture

"when I did"

key word is 'when' only the chinese get to do that now.

Tue, 01/06/2015 - 13:42 | 5628644 847328_3527
847328_3527's picture

Are those Barzilain gals as hot as they say?

Tue, 01/06/2015 - 11:04 | 5627754 NotApplicable
NotApplicable's picture

Other than new pipelines and rigs, just how much steel demand does the oil industry have anyway? I'd posit that both oil and steel demand collapsed for the same reason (credit-fueled crack-up boom/bust). Saying that steel demand is down due to weak oil demand is to obfuscate the Fed's role in all of this.

Tue, 01/06/2015 - 11:09 | 5627773 Winston Churchill
Winston Churchill's picture

You have it.

756 workers is a lot of steel. don't know the current tonnage is per worker, but its huge.

Tue, 01/06/2015 - 11:24 | 5627839 silverer
silverer's picture

You have a point. Steel used to employ more labor. Now they optimize with lots of automation. 756 is a large number, which makes this even scarier.

Tue, 01/06/2015 - 11:47 | 5627937 disabledvet
disabledvet's picture

Ramp up production of military hardware.

 

This ain't the great depression.  Those production lines are still running.

 

The Federal Government needs to massively downsize too.  The postal service is pure discretionary income.  Unless they are to be used to transport everything of course....

Tue, 01/06/2015 - 11:13 | 5627785 NoDebt
NoDebt's picture

I think you're right about that.  There cause and effect seem to get blurred together here too often.  If we drop into another recession (inside the larger Depression) will the drop in oil prices have CAUSED that to happen?  Doubtful.  No more than subprime mortagages CAUSED the 2008 financial cirisis.  It's a triggering event at most, an early-onset symptom at the very least.

Tue, 01/06/2015 - 11:16 | 5627801 p00k1e
p00k1e's picture

Agreed.

 

Food prices will collapse next. 

Tue, 01/06/2015 - 12:07 | 5628032 sessinpo
sessinpo's picture

Damn,

All these people jumping into the deflation bandwagon has me nervous. Just over a year ago, I had to argue that deflation was coming while the inflationist laughed at me. But I'll stick to my orginal forecast and points as I always have.

Tue, 01/06/2015 - 11:31 | 5627865 indygo55
indygo55's picture

I make tooling for the pipe industry and US Steel makes a lot of pipe in Texas. Until now. That's pipe for the oil industry. All API stuff. Its related to oil for sure. 

Tue, 01/06/2015 - 11:07 | 5627768 Ironmaan
Ironmaan's picture

Oil is down because of the global economy. Steel consumption is down for the same reason. Idling steel plants has nothing to do with the low price of oil. Dumb article.

Tue, 01/06/2015 - 11:12 | 5627787 kaiserhoff
kaiserhoff's picture

It will be news when goverment drones start getting pink slips.

Tue, 01/06/2015 - 11:08 | 5627774 GIABO
GIABO's picture

How the CIA Launched the «Financial Pearl Harbor» Attacks on Russia and Venezuela
Wayne MADSEN | 20.12.2014 | 00:00

Central Intelligence Agency director John Brennan's long familiarity with Saudi Arabia, owing to the time he spent there as the CIA station chief in Riyadh in the 1990s and his knowledge of Saudi oil operations, has paid off. Petroleum industry insiders claim that Brennan's agents inside Saudi Aramco convinced the firm's management and the Saudi Oil Ministry to begin fracking operations in order to stimulate production in Saudi Arabia's oldest oil fields. The Saudis, who are not known for their hands-on knowledge of their nation’s own oil industry, agreed to what became an oil pricing catastrophe which would not only affect Saudi Arabia but oil producing nations around the world from Russia and Venezuela to Nigeria and Indonesia.

By pumping high-pressure salt water into older wells, some at a depth of three to six thousand feet, an inordinate amount of pressure was built up. The CIA's oil industry implants knew what would occur when the fracking operations began. Due to the dangerously high water pressure, the Saudis were forced continuously pump oil until the pressure became equalized. That process is continuing. If the Saudis ceased pumping oil, they would permanently lose the wells to salt water contamination. In the current "pump it or lose it" situation, the Saudis are forced to pump at a rate that may take up to five years before they can slow down production rates to pre-glut levels.

The corporate media, including the Bloomberg and Dow Jones virtual business news monopolies, issued news reports claiming that the Saudis agreed to keep production high at the November meeting of the Organization of Petroleum Exporting Countries (OPEC) in order to retain their market share amid increased U.S. oil production from fracking.

The net result of the CIA-inspired fracking operations, which the Saudis were warned not to pursue by petroleum engineers working for some foreign-based firms like Schlumberger, is that there will be an oil supply glut for the next 5 years. The glut will be followed by a reduction in Saudi oil production unless new oil fields are brought on line. There is now a major push by U.S. and Canadian oil companies to bring online the Keystone XL pipeline from Canada to the United States to offset the expected sharp rise in oil prices in four to five years. But with Canada suffering financially from the drop in oil revenues, the Keystone XL project is also on financially shaky ground.

The CIA operation to frack Middle Eastern oil fields was not only limited to Saudi Arabia. Oil industry sources have revealed that similar fracking caused over production problems in Kuwait and Iraq.

The CIA’s sabotage of Saudi and other oil fields is not a first for the agency. In 1982, a massive and devastating explosion of the Trans-Siberian Pipeline was said to have been the work of Trojan horse software implanted by a Canadian company on behalf of the CIA. Former U.S. Air Force Secretary Thomas Reed, who served in the Ronald Reagan White House, confirmed the CIA’s role in the industrial sabotage. The CIA cooperated with the Israeli Mossad in creating the Flame computer virus that crippled Iran’s nuclear enrichment equipment. Another CIA-Mossad virus, Stuxnet, had wreaked havoc on nuclear power plants around the world.

The CIA is believed to have played a part in the crash of the Russian-made Sukhoi Superjet 100 in May 2012 in Indonesia. A Russian military intelligence spokesman said that U.S. industrial sabotage in downing the flight, which killed 45 Indonesian and Russian nationals, was considered a likely cause. The crash came after the head of the Russian space agency, Roskosmos, said he believed that it was possible that the failure of the Phobos-Grunt mission to the moons of Mars may have been caused by American sabotage.

The CIA’s use of industrial sabotage against the Cuban sugar industry, the Chilean and Zambian copper industries, and the Haitian rice industry is legendary. Explosions at oil refineries in Iran, Argentina, Mexico, Ecuador, and Venezuela, pipeline explosions in Syria and Libya, and a Brazilian Petrobras marine oil rig collapse, have been attributed to CIA proxy terrorist groups.

The result of the sudden decline in oil prices has resulted in heavy damage to the economies of the CIA-targeted countries of Russia, Iran, and Venezuela. Brennan and his economic warfare operatives absolutely banked on the Saudi over-production to harm the economies of all three countries and the CIA has not been disappointed. The CIA figures that «regime change» would bring to power pro-U.S. governments in Russia, Venezuela, and Iran.

Already, from his base in Switzerland, exiled Russian tax evader billionaire Mikhail Khodorkovsky has called for President Vladimir Putin's violent overthrow and even his assassination. Meanwhile, the U.S. Congress took its cues from the CIA and voted to impose devastating economic sanctions on both Russia and Venezuela. President Barack Obama approved the congressional sanctions. Similar congressional legislation to increase sanctions on Iran is pending.

Russia has been harmed the most by the CIA's Saudi oil production scheme. The Russian ruble fell 56 percent in value against the U.S. dollar while Russian interest rates climbed to 17 percent. The price of shares of Russia's largest lending bank, Sberbank, fell 18 percent. Although the Russian economic collapse has resulted in financial ripples around the world, with Austrian and French banks losing their stock values and the value of the Polish zloty and Hungarian forint falling against the dollar, the Obama administration says that there will be no easing on economic sanctions imposed on Russia over Ukraine. Obama has also put the individual and institutional investments of American holders of Russian bonds in dire jeopardy.

The Pacific Investment Management Company's (PEBIX) Emerging Markets Bond Fund, which holds over $800 million in Russian bonds, has lost almost 8 percent in value in the past few weeks.

Meanwhile, basic staples in Venezuela, including cooking oil, rice, and corn flour, are becoming hard to obtain. On the Venezuelan black market, the U.S. dollar has jumped 1700 percent in value against the Venezuelan bolivar. The CIA is using the financial collapse to push for an undemocratic overthrow of the Venezuelan government and CIA operatives are providing cash payments to Venezuelan opposition politicians and provocateurs.

Iran, which has been under punitive Western economic sanctions for a number of years over its nuclear power program, is probably best able to weather the storm. Iran has built up a rather impressive domestic food production, telecommunications, and oil industry infrastructure to survive the sanctions. However, Iranian President Hassan Rouhani appears very aware of the Saudi role in the conspiracy to drive down oil prices. Recently, Rouhani said of the drop in oil prices, "The main reason for [it] is political conspiracy by certain countries against the interest of the region and the Islamic world and it is only in the interest of some other countries . . . Iran and people of the region will not forget such conspiracies.»

The economic hardships imposed on oil-producing Indonesia, the world’s most populous Muslim country, has resulted in an opportunity for the Islamic State to gain adherents in the country, especially among the young and unemployed population. The economy of China, which is hoping to begin pumping oil from lucrative marine reserves in the South China Sea, is feeling the strain of lower oil prices. Mexico, wracked with social instability, has also suffered from the CIA’s machinations. However, instability in Mexico has always been advantageous for the CIA, which continues to benefit from the illegal drug trade that keeps the agency’s slush fund accounts flush with cash.

Brennan's and the CIA's industrial sabotage of the Saudi industry will continue to have far-reaching effects on the world economy. Oil industry insiders fear that the CIA has unleashed something that may deal a devastating blow to the global economy from which it will be difficult to recover.

Tue, 01/06/2015 - 11:38 | 5627905 free_as_in_beer
free_as_in_beer's picture

saltwater contamination loss of oil?  what?

Tue, 01/06/2015 - 11:54 | 5627956 disabledvet
disabledvet's picture

They pump co2  not "saltwater."

 

Folks talk about "global warming" which is ironic because carbon sequestration actually gets more oil out of the ground.

Tue, 01/06/2015 - 12:00 | 5627997 dscott8186
dscott8186's picture

I am pleased to hear this, my tax dollars are reaping a satisfactory return on investment.  

BTW - Brennan has only been in charge since March 2013 so, you also need to give credit to former Director Petraeus.

 

Your analysis also misses the objectives of Sunni Saudi Arabia in its confrontation with Shiite Iran, there is a struggle for the heart of Islam which the Sunnis aim to win at any cost. Russia is an ally of Iran and Syria so economically harming them as well is a logical response. The feckless incompetent Obama started this mess with his isolationist policy and destabilzation of Sunni governments in the M.E., now Saudi Arabia has responded with an effective mitigating policy of cheap oil.  Of course, stopping fracking in the US and the Keystone XL pipeline by driving down the price of oil below fracking's break even point is a bonus for them.  Fracking was inevitable in any event since the Saudi's and for that matter all oil producing states greatest fear is when the oil runs out.  

The idea that the CIA was helping Saudi Arabia in mitigating the US decline is a positive despite the feckless incompetence of Obama.

Tue, 01/06/2015 - 11:10 | 5627777 youngman
youngman's picture

You dont need drilling pipe if you are not drilling...pretty simple supply and demand i would say

Tue, 01/06/2015 - 11:24 | 5627838 p00k1e
p00k1e's picture

Detroit is getting a new Hockey Entertainment complex. 

Inglewood might get a stadium too.  

Tue, 01/06/2015 - 11:36 | 5627894 bmr22
bmr22's picture

Now that is what we need to be spending out last dollars on

Tue, 01/06/2015 - 11:56 | 5627976 Atomizer
Atomizer's picture

The hockey puck award gives $100,000 EBT award points. Come back to our ghetto. It's rebuilding on taxpayer monies and covering pensions on rat bastards that ran this city into the ground.

:)

Tue, 01/06/2015 - 11:10 | 5627779 alexmark2013
alexmark2013's picture
Oil falls below $49; analyst warns the sector is facing its 'Hunger Games' http://investmentwatchblog.com/oil-falls-below-49-analyst-warns-the-sector-is-facing-its-hunger-games/
Tue, 01/06/2015 - 11:11 | 5627784 silverer
silverer's picture

"Temporarily" idled. Sounds pretty optimistic to me.

Tue, 01/06/2015 - 11:17 | 5627807 saveUSsavers
saveUSsavers's picture

How long before Emperor O'Bummer intervenes in an election- important state like Ohio? I smell a news conference!

Tue, 01/06/2015 - 11:26 | 5627843 p00k1e
p00k1e's picture

Big O will be in The D tomorrow talking up his auto industry bailout even though Bush approved the bailouts when he “Destroyed capitalism to save capitalism”. 

Tue, 01/06/2015 - 11:45 | 5627929 Atomizer
Atomizer's picture

Ohio is a love, hate state. Grew up there. Since the DNC Niger has taken control. It’s an entitlement armpit in OHIO. Without NINJA loans, these dumbfucks cannot afford a $400,000 home. Did I mention, I hate snow!  Rental revenue is great. East side and downtown is a DNC ghetto. Strongsville & Medina County (Bath) are high end. Food for thought.

Tue, 01/06/2015 - 11:21 | 5627834 Atomizer
Atomizer's picture

Collapsing a strong Oil market to build a green coal environment. Electric Cars need to be plugged in at $25/hr. Shhh. You didn’t hear it from me. Meter maids will write a $350 fine if your car is sitting beyond recharging station cap off period.

/sarc

Tue, 01/06/2015 - 11:28 | 5627854 surfvin
surfvin's picture

Zirp and qe prop up the rot at the expense of the fruit.

Tue, 01/06/2015 - 11:37 | 5627898 LawsofPhysics
LawsofPhysics's picture

yes, and ZIRP is still going on...

Tue, 01/06/2015 - 11:57 | 5627988 Atomizer
Atomizer's picture

NIRP will rain bullets. FYI.

Tue, 01/06/2015 - 12:05 | 5628023 homiegot
homiegot's picture

We fired some folks.

Tue, 01/06/2015 - 12:14 | 5628049 ThroxxOfVron
ThroxxOfVron's picture

MOAR of the 'Oil below $100 = DISASTER' bullshit.

The last time the world suffered an extended period of high Oil prices it was called The Oil Shock.

NOW the mantra is that if the shockingly high prices aren't sustained indefinitely the world will end!

 

Maybe the fact is that Oil producers want real value for their product?

-That Oil Producers do NOT want to be paid for real product with phony or counterfeited money?

-That since the world has been flooded with counterfeit money the Oil Producers want to charge multiples of what Oil would cost without the flood of counterfeits?

Maybe if the Central Banks of the world cease to counterfeit their own currency the price of Oil and Oil sensitive commodities would do exactly what it is trying to do: revert to mean?

 

UNfunny: Labor is reduced to accepting wages at par with 1980 but are being told that Oil and everything related to Oil must be priced 500% of the 1980's inflation adjusted price or the wheels will come off.

Maybe Labor in the Developed Nations is justified in wondering why it should not be compensated at 500% of the 1980's inflation adjusted price of Labor in the Developed Nations?

 

Maybe the fact the China has vastly overbuilt it's steel production infrastructure and is busy dumping steel on the rest of the world causing a deflationary collapse in prices has something to do with an aged steel plant hobbled by environmental restrictions unknown in China being retired during this episode of Chinese steel dumping?

Tue, 01/06/2015 - 12:21 | 5628084 fishwharf
fishwharf's picture

Sorry about the steel workers and anyone else who may have lost their job due to low oil prices, but I sure like paying half of what I was paying for gas a year or two ago.

Tue, 01/06/2015 - 12:47 | 5628238 redd_green
redd_green's picture

What a load of horse crap.   LOW energy prices are idling steel plants?  Three words ba-lo-ney.   We'll never know who is manipulating oil prices, but big power shifts are happening.  in the mean time, its CHEAPER to make steel, its CHEAPER to refine copper, its CHEAPER to run any damn industrial plant, and its CHEAPER to make any commercial or consumer product.   Cheap oil should cause a spike in production, not a trough.   Where do these people get this garbage from?

Tue, 01/06/2015 - 13:18 | 5628460 Grouchy Marx
Grouchy Marx's picture

It might be related. Low oil price means no more oil exploration, as it doesn't pay, no more pipeline projects, etc., no more refinery build-outs, etc. Low oil is indicative, probably, of a crash in general industrial demand. So they are indirectly related there - lower industrial demand for both oil and steel, but also directly as stated above. Tar sands, shale oil, deepwater drilling is all idled pending higher oil prices, and that depends on world demand.

Tue, 01/06/2015 - 13:43 | 5628651 Jack Burton
Jack Burton's picture

Iron ore is down 50% and I expect further drops on the news od steel plant closings. The Iron Ore those plants use passes right by my window and our ore oading facility of Lake SUperior connects the iron mines to the plants out east. So far, no news of layoffs or production cuts here. Yet I expect big news soon. With a 50% drop in price, our high cost Iron Ore pellets are in the part of the market that should fell the price pinch first. Low cost Brazilian Ore is being produced at full capacity because they are a low price producer and are about to kill the competition. Namely our mine and plants in NE Minnesota. Still, right now there are two 1,000 foot Ore Ship loading outside my window in the harbor.

Tue, 01/06/2015 - 13:46 | 5628677 847328_3527
847328_3527's picture

Inevitable housing market collpase next. Unemployed peeples have a hard time buying/paying for overpriced boxes no matter what contortions the Fed does.

Tue, 01/06/2015 - 13:51 | 5628694 SmittyinLA
SmittyinLA's picture

it has nothing to do with low oil prices, its just cheaper to forge steel everywhere else, even if oil prices go back up (don't worry) https://www.google.com/search?q=CA+DMV+lines&espv=2&biw=1024&bih=649&sou...  those jobs will not come back.

Steel will be forged elsewhere where the steel forgers aren't forced to support the solar, windmill, battery & financial mayhem industries. 

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