Is Cheap Oil KILLING Your Project and Your Business?
- Halliburton lays off 1,000 employees in Eastern Hemisphere
- Chevron Laying Off 1,500 as Part of Downstream Restructuring
- U.S. Steel to lay off more than 700 due to falling oil prices
- Starting layoffs, cutting budgets: Louisiana oil service companies already adjusting to falling crude prices
- Hundreds with oil company get layoff notices
Open any newspaper or listen to any financial broadcast and the price of oil will certainly be mentioned. It is impossible see a commodity like oil get cut in half in the space of 7 months without some major fallout!
With current oil prices under $50.00 / barrel – What is the potential fallout besides the ranks of the unemployed expanding?
- The highly leveraged fracking industry may begin defaulting on notes to banks
- Junk bonds used to finance oil related projects got hammered this week as credit quality of the issuers plummets
- Small exploration and production companies could go out of business in mass if the price of oil drops further and stays down for an extended period
- All support industries like suppliers, equipment manufactures and yes even leasing companies all look to face some difficulty in this environment.
- Communities that thrive on oil production and exploration may see some tough times as oil companies are immediately reacting to the drop by scaling back production and furloughing workers.
As they say at the theme park “Keep Your Arms and legs in and PLEASE NO STANDING” The same could hold true now for the oil and gas industry.
Good luck to all those impacted by this unfortunate turn of events that is impacting hard working people all over the US and communities that are already feeling the anxiety of a rough patch ahead.