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"Unambiguously Bad"
As of November, oil and gas companies employed 543,000 people across the U.S., a number that’s more than doubled from a decade ago, but as Bloomberg reports, thousands of energy industry workers are now getting their pink slips as crude prices have plunged to less than $50 a barrel. "For the oil and gas industry, it’s scary," explains one worker, adding "I was blind to the ups and downs associated with the industry." Can we blame him, watching business media and one could be forgiven for believing this plunge is "unambiguously awesome." As the following chilling chart shows, however, it is not...
Stunned by the sudden plunge in the price of oil, energy companies have increasingly resorted to layoffs to cut costs since Christmas, shocking a new generation of workers, like Osakwe, unfamiliar with the industry’s historic boom and bust cycles.
Workers who entered the holiday season confident they had secure employment in one of the country’s safest havens now find themselves in shrinking workplaces with dimming prospects.
As the following anecdotes illustrates, more than a few Americans are becoming greatly disillusioned...
Sean Gross, 35, was over the moon when he secured a job in March last year at Schlumberger Ltd., the world’s largest oilfield service company. He’d been laid off from a technology company and saw the oil business as his salvation.
“I was happy. My life was starting to take shape. Life was really, really, really, really good,” he said.
...
By December, Gross said talk was spreading through his Houston office about people losing their jobs “left and right.” Old-timers were suddenly retiring. Yet Gross still thought he’d be okay working in information technology far from the oilfield.
...
As a newcomer to the energy industry, he didn’t realize how crashing oil prices would ripple through the company. He’d made it through another unsettling day and was in the parking lot, buckling on his motorcycle helmet for the ride home, when he looked up to see his boss running after him. “Hey Sean, I need to talk to you in my office.”
“Oh God, here I go again,” Gross recalled thinking as his boss delivered the news that he was getting laid off.
There’s no firm number yet on how many oil industry workers are losing their jobs, or how many more cuts might be coming... some are well known like Halliburton and Suncor but other companies have announced layoffs, but many are making the cuts without public fanfare.
As the following comments from energy sector executives notes, things do not appear to 'stabilizing'
“We are constantly in the process of trying to right-size our company,”
“We do anticipate a continued downturn in domestic drilling activity.”
...will continue to make adjustments to its workforce “based on current business conditions,”
“While these reductions are difficult, we believe they are necessary to work through this challenging market,”
* * *
Still unsure whether to 'believe' - here is some data... it's not just about the energy sector workers... they are the highest paid workers of the new normal and the multiplier effects are clear...
As oil started to slide, Texas was the first to show decoupling from the broad US picture. Then as the plunge accelerated, both Texas and the other major Shale States saw big surges in initial jobless claims (most notably in PA and CO recently). This is now bleeding over into the broader US jobless claims data...
Chart shows 4-week average of initial claims rebased to 100 at end Aug 2014.
* * *
We leave it to industry workers to sum it all up:
“When the oil price goes down, everything happens quickly,” Beaton said.
As industry analysts and consultants increasingly predict that low oil prices could linger for years, laid off workers face a workplace where their chances of getting rehired by an energy company are remote. Many don’t plan to even try.
“I’m pretty much decided I’m not gonna do this oil thing again,” Brewer said.
* * *
"Unambiguously bad"
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US starts it to hurt Russia, Russia will finish it to finish the US...
Obama to Mededev (overheard on hot mic): "Just give me a little more time until after the elections"
That was taken out of context. He said Michelle was playing the role of Chewbacca's mom in the upcoming Star Wars requel.
Ooh, I wonder what he meant by flexibility then.
"Workers who entered the holiday season confident they had secure employment in one of the country’s safest havens now find themselves in shrinking workplaces with dimming prospects."
Stop it. I'm getting all misty.
We fired some folks.....and If you like your oil, you can keep your oil......just not your job
PLEEEZE!
"We restructured some folks."
We right-sized some folks.
We fucked over some folks......yup, we got um good! Now, when's my tee time?
Shale oil was driven by cheap FED money and was a classic mal-investment.
Can I get an 'amen' from the "Austrians" in the crowd?
Oh, the "Austrians" were all invested in oil?
Well then, bend over and stay bent over.
<< Workers who entered the holiday season confident they had secure employment in one of the country’s safest havens now find themselves in shrinking workplaces with dimming prospects. >>
Similar to, "I thought house prices never drop."
Where's my hanky.
.
Amen, brother. I told the Peak Oilers, more than once, about the satanic FED.
We are now going to have a proxy war with Saudi Arabia via ISIS.
http://hotair.com/archives/2015/01/15/saudi-arabia-building-massive-wall...
If SA loses, I predict the the Peak Oilers will be back, parroting their BS within a few short years, as oil skyrockets.
He may regret saying that.
I thought this was a normal business cycle (well, I agree the .fed had easy money that made it even more possible)? The price of a commodity went up (aka oil). The business community found a way to fill produce the product (aka shale oil, tar sands, etc). The supply increased beyond demand and the price went down (oil price crash). Now the producers who can't make money are going out of business and downsizing.
Normal. Business. Cycle.
But, the rest of the system is all jacked up by the policies of the admistration and .fed.
Oh, you know that grapevine too?
543,000 work for the oil companies and probably 2 million employees in ancillary businesses like Electric companies, midstream peeps, lawyers, strippers.
The day is coming when even ZH'ers are going to be scared shitless, more so the ones laughing at job losses, thinking their job is somehow going to be safe.
Less so the true believers who have guns, gold, and groceries.
At least most of these guys in the oilfield probably have enough physical dexterity to build a tiny house (tumbleweed, etc). I doubt the mortgage brokers at bank X and JCP cashiers and stock people will be able to do the same.
WWWWWWhhattttt????????
Stand in line with their hand out? overqualified!
I got slaughtered in the original bubble - high tech.
Savings, paycheck and career slashed.
Clinton opened up the flood gates and foreign workers streamed in on visas and popped the "bubble"
The "good jobs at good wages" disappeared. People had trained years for these jobs, unlike these oil workers.
The news media took exactly no notice.
Long story short:
Welcome to 21st century America.
I need market priced gasoline.
Bend over.
Seriously, when I entered the tech field it was US dominated, H1B visas were not a thing yet. I remember thinking, the future demand for comp sci is going to completely overwelm the meager supply of those of us studying comp sci at top schools (while everyone else partied).
Then I found that the doors were opened and I faced a huge amount of competition, while those who "studied" poly sci went on to lucrative careers in the government.
And the US now wonders why no one domestic enters engineering.
"And the US now wonders why no one domestic enters engineering."
+1000
The only people who get my sympathy in this oil debacle are the engineers.
I am already out of the workforce. One of the 92 million. I AM laughing at all of this shit.
Two down votes so far, those would be the resident shills, or BTFD'ers.
Speaking of groceries, I was looking at 5 gallon buckets and bags of grains and beans from West Mountain Wheat again before this story got posted. I have a bad feeling.
"More than a few Americans are becoming greatly disillusioned..."
That's what happens when the illusion starts to fall apart.
"We disillusioned some folks...."
Still funny
Yes, yes it is.
Bullshit, US businesses and investors wanted to make money, and the opportunity was there (in many counties) to do it via oil and gas, so they did. Duh!
That meets up with the 4 straight years falling global macro trends. Thus you have very rapidly rising global production, crashing into a gradual but very persistent slow global economic slowdown and financial destabilization.
But no, we have to fit the basic commodity cycle process into a vapid US v Russia v Saudi conspiracy theory, for your fetishism?
Fuck off!
The people who invest, own and operate the industry want money and sustained business, they did not do this for another reason, they did not build their businesses up just to hurt someone else, or some other country.
Get a grip.
"thousands of energy industry workers are now getting their pink slips"
Wow. As many as thousands, huh?
State and local governments have laid off TENS OF THOUSANDS of people the last few years. Don't hear any tears shed for them. OK, government workers are useless as tits on a bull. But they're still "middle class jobs".
Ya but many of those laid off at the state and local level have been rehired as paid trolls to infect blogs. It is known that public opinion needs to be swayed away from reality so that the illusion that the US still has an economy (hence USD validity) can be be maintained. If we all don't "believe" in the USD, then its reserve status and value goes poof.
Some trolls even work for the banks:
https://www.youtube.com/watch?v=eWYW0H7-c_w
Huh? Government employment has been growing faster than any segment- if you're black, female, and have an AA in data processing, you're queen of the world.....
Laying off Government is a GOOD thing, helps the economy, because they produce NOTHING and exist on taxpayer money.
Most Govt employees getting laid off get huge pensions and benefits packages, then get uinemployment, then go on permanent disability with free fucking everything. Fast track to easy street....and we pay for it.
And once you are there 90 days or so you can start mouthing off and demanding "accommodations" without fear of job loss.
Hell! You'll get promoted!
And Lezzo, Damn it - you forgot the F'ing Lezzo...!!!
Tens of Thousands?? I can't find a one of them and feel no loss of service of any kind. >Gov emps are so fucking worthless we could lose Millions of them and never even notice, except that life would be simpler. As .gov spends twice what it brings in, it could lose half the .gov leeches and we wouldn't even notice.
Those jobs are a net drag as there is no production valuee. The oil sector jobs are net positive as there is a real contribution from production. Hardly equivalent. So no, no tears shed.
I agree but the article was about the plight on the energy workers. Losing a good paying job hurts either way, no matter who you worked for. What I'm saying is "I don't give a shit if you lost your job, I like cheap energy."
....Not when your salary consists of 100% taxes.
Bloated employment in the oil industry fixes itself- bloated employment in Government never fixes itself.
Apple to oranges.
"State and local governments have laid off TENS OF THOUSANDS of people the last few years. Don't hear any tears shed for them. OK, government workers are useless as tits on a bull. But they're still "middle class jobs".
Bullshit. Useless leaches every last one of them. Aside from protecting our borders every last government job should be privatized with strict guidelines and enforcement.
Boom-Bust Bubble>Pop economic system.
No way to run a country but a hell of a way for the elites to get richer.
you would think that this being the third time in 20 years, most "folks" would get it. i can forgive the young, as i had to learn my own hard lesson in 2000. but i have no sympathy for the baby boomers if they get wiped out in the stock market this time. tough luck greedy bastards.
Folks don't even remember 2008/9 .look at housing.
Gruber was right: fucking stupid.
The suck has arrived. The oil patch has always been boom and bust but a lot of optimists thought this time it was different. Now a lot of people are trying to predict its death and that won't happen either but in two years the game will look a lot different.
Should go full ugly in about 6 months.
Maybe less.
They'll become cops to keep them from becoming crooks.
cops, crooks, murders, it's the same thing.
"They'll become cops to keep them from becoming crooks."
Returning vets are getting those jobs.
This is what happens when demand is down and supply is up in an overly financialized levered system. The margin calls come in fast on any steep decline in price. Good for us, sucks for the workers.
You mean they shouldn't have bought that $60,000 crew cab diesel dualie for Christmas?
That's not American, especially for a deck hand who spends more on tatoos than on savings.
Glad I didnt leave the consulting world to log cores for the oil companies.
Don't be so cruel. My 3D printing business is down for the year due to no more local orders of truck-balls.
Do you have any Chrome "Big Balls" in stock?
Why is a fat, ugly, man hater bitch always driving a truck so adorned?????
"Balls" said the Queen
"If I had two I'd be King"
The King He laughed
Not because he wanted two
But because He has two
Mine got stolen no less than (3) times. After that, I decided being a gelding wasn't so bad...
Hmmm, chart correlates to the November elections too... how convenient. If you dont prep, now is as good a time to start.
So, high oil good, low oil bad....
thus, making things less expensive to transport, less expensive to grow, less expensive to manufacture, etc... is a bad thing. cheaper gas clearly makes things less expensive, and what we really need is more expensive stuff. cuz, the more expensive it is, the more money our companies can make, and that means more money for employees and share holders and stuff. oh, and the more expensive our shit is, the more the foreigners are going to want it. so, yeah. expensive oil is good. quick, start jacking up the prices and destroying production.
banksters have captured yield spread ... business will capture lower energy prices
by that, outside of gas prices at the pump ... you'll still pay the same for most everything else ... business will pocket the gain (bottom line sez thank you very much)
My buddy made the point that collapsing oil prices and the derivatives on them are not the "real economy." What he left out is the real jobs provided by the oil sector that are very much the real economy. Duh.
energy capex the past few years has been of the few bright spots in US economy ... now plans going forward are being shelved ... and layoffs for existing production? not good
no doubt there are some benefits to low energy prices but (especially the short run) outweighed by drawbacks in an energy producing economy (US is a, if not THE, largest oil producer in the world)
I'm glad you've come to see the error in your previous thinking. And by the way, the government is working on jacking up prices as we speak- more taxes on energy. A 15-20 cent/gal. hike in Federal gasoline taxes is a lock at this point. Not a single person in Congress pushing back on that. Pennsylvania (my home state) just raised them 10 cents as of Jan 1 (with automatic increases to follow each year).
Yep! That's about all I am hearing in our state. "We need to raise the gas tax" to fix our roads. The moron voters will go right along... yea we need better roads.
The assholes in the state house will get a tax increase and the only thing that will come of it is...We need more money the roads are in worse shape than we thought!
The fed will raise rates also. The consumer gets double butt fucked and can't figure out why. Wash,rinse,repeat! No thieving, ass raping politican will be held to account as per usual, while the sucker taxpyer gets stuck with the endless bills.
FUBAR!
The legislature in my state increased gas taxes last year.
One voter referendum later - REPEALED.
Lower prices means that oil production is going to take a hit. We'll go from oversupplied to undersupplied and prices will go back up, barring us waking up one morning only to find the entire financial system frozen. Oil needs to be expensive to justify current production levels. How much is $2/gal gas worth to you if the gas station has no gasoline to sell to you?
Gonna take a while for that supply to get used up considering demand is nearly non existent and is declining.
Do't worry, State gov will step in and fuck you in the ass with new taxes on gasoline to offset the decrease in price at the pump.
FEDGOV and STATEGOV. pumping you in the ass. It's what they do best.
GOV, it's a growth industry, at your expense.
In case you hadn't noticed, diesel (the thing that runs commercial trucks) is still twice the price of gasoline.
Today's diesl price at the Speedway by the office is $3,49 while unleaded regular is $1.89.
Maybe you ought to start a big rig business that uses gasoline engines. Brilliant!
Diesel engines put out way more torque and last much longer than gasoline engines.
My 1995 Ford 7.3 Diesel has 278+ thousand miles and still going strong - when I can afford to fill up.
All true, save for when an injector seal blows - or an injector itself...
When the only real employment growth has been oil/gas - yeah this is bad.
Quick - need another 50+ billion government investment in solar technology.
but but Lagarde said ...
the state furloughs are coming, you can bank on that
I hope this doesn't affect the newly minted petroleum engineers, who went to school when US oil production was ramping up big time. Now they could get the shaft (no pun intended).
please don't tell my mom i work in the oil patch. she thinks i'm a piano player in a whorehouse - 1980s bumper sticker
at least it will be the horizontal shaft this time around.
Who writes this bullshit?
.
It's about the 8th article about how awful low oil prices are. It's ridiculous, and fooling no one with an IQ over 95. Makes one wonder just who thinks this viewpoint has merit, and why.
For every oil worker that gets hurt there are 10,000+ consumers that get helped. I'll take those odds, thank you.
This is not about the price of anything nor is it about "consumers." Speaking as a person who used to be a steelworker way back when this country produced quality steel, this is not a plus/minus balance sheet issue.
It is about jobs, the kind of jobs that can support a family. Steel used to be good but now no more for the U.S. The loss of oil industry jobs means the loss of those same types of jobs. Good jobs. Jobs where you produce something.
Oil won't be down forever tho. The government will come up with something--like a massive war.
And by the way, we are not "consumers." We are citizens.
except, these rigs won't just go away. they'll be mothballed until the price goes right back up. and people will get those jobs back.
I give it 6 months before the price is jacked right back up... just in time for the summer commuting season. FU commuters. the oil companies want your money.
Coincidentally, Evgeny Federov gave it 6 months, too. He's a member of the Russian congress and says this is an attempt to oust Putin by spring. He's on Youtube.
http://www.youtube.com/watch?v=VT085isnyB0
It means the Saudi's aren't playing ball with DC. Look for their gov. to be challenged, or toppled, within the year.
Unambiguosly good. We have been waiting for something to collapse for so long now that it brings a sort of relief to get it over with. I'm a Texan. Anyone who did not expect this hasn't been in Texas very long. Maybe this is new in ND but it's just another downturn in the oil business around here. Rake in the big bucks when you can and then go fishing when it falls apart.
That was probably the best damned comment of the whole thread. Wish I had said it, but up in PA nobody knew this was how the energy sector worked (plus we're mostly nat gas up here).
"Lettin' the high times carry the load"
oh man... I have a need for live music, red pop, bbq and white bread now... good times...
Cain's Ballroom.
thank you for posting some common sense in this thread, nicely put...
this just means the operators that know what the hell they're doing and aren't leveraged to the eye teeth will scale back a little, become more efficient, pick up some fire sales off of their less shrewd competition, then keep on keepin' on... same as it ever was...
To anyone employed in a "boom and bust" industry (which is most of us)...
During the boom live within your means. Take the smallest most modest rental you can squeeze into. Skip the new car. Stack your savings as high as possible. Then when the SHTF buy a house cash or at least 50% down. Once shelter becomes a very small part of your fixed costs, hustling up the rest isn't so daunting. Hell, if your willing to rent a room that can cover a good chunk of the rest...
The rules changed a long time ago. Anyone seeking "safety" in a 40 hour a week gig is living a few decades in the past...
Preach it...
Fuckin', eh, Bubba, _leverage_!!!
The movie was only okay, but EVERYONE should hear and pay attention to John Goodman's monologue on the "Fuck You Position" from The Gambler. Straight truth.
... and, by all that's right and holy in the world, if you work in IT never ever forget that you are a *cost center* and will be one of the first on the chopping block when belts need to be tightened...
One cannot expect the roughnecks to understand how BIG oil works
until they find themselves on the outside of the BOX looking in. Thus,
thinking outside the BOX is the only way to really think about anything
IMHO. Groupthink just cost BIG oil trillions and counting, SUCKERS.
God I wish I had money to invest on a short. Someone is making money on the downside of all of this IMHO.
“I was happy. My life was starting to take shape. Life was really, really, really, really good,” he said.
Sorry Sean. It's a mad, mad, mad, mad world.
Shit. Anybody in a Halliburton truck in my town has had his vehicle defaced or outright trolled for more than two years now.
I think some local fart-loving pranksters even gained acclaim by craftily replacing "Halliburton" truck decals with "Hellihurtin."
Reap what you sow. Do good works all your life and the regular man's pillow of regret is a soft, downy lap of delight.
Looks like Rado Shack bankruptcy, Target closing all stores in Canada and Best Buy getting slaughtered due to weak forward guidance. What could go wrong?
I'm still waiting for Sears, JCP and the hundreds of tiny retail chains to weigh in. I mean, how do tiny clothing stores like "Mildred's Closet" survive?
Probably, the same way Sears and JCP do, with very low interest loans(theft via the FED).
http://www.theonion.com/articles/even-ceo-cant-figure-out-how-radioshack...
Throwing up freshly regurgitated metaphors from the late 80's is not thinking outside the box.
Oh no, you're mistaken. Parker Lewis can't lose.
SLB, HAL, and NOV getting hammerd near the close, after falling most of the day. SLB bumped its divvy, but they better have something good to say in their earnings after the close or things will get real ugly.
Oil workers are being paid above minimum wage, so the pressure is on from the White House to reduce or eliminate those jobs -- or move them overseas!
"we just don't give a fuck about some folks"
First time I've heard "right-size" our company.
New HR bullshit word?
Guess you haven't been around long enough. That phrase gets dragged out every time there's a recession and major layoffs. Even George Clooney used it in that movie where he's a right-sizing consultant.
Terrible for the oil industry, yes. Many will lose jobs and face economic tragedy. It's not their fault, and they should receive assistance. However, the rest of the country will prosper from cheaper energy.
Unambiguously wrong