LayOff

[ny hunter]

Glad you got to enjoy the down time............Have fun at work........

[stoneam2006]

I got a layoff slip last wensday I'm in Union shop so I can bump to other jobs I've held....we will see how it plays out....

Sorry guys but really need oil to come back up

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[Doc]

I got a layoff slip last wensday I'm in Union shop so I can bump to other jobs I've held....we will see how it plays out....

Sorry guys but really need oil to come back up

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I need some help with that thought. I keep hearing this all the time when they whine about the stock market suffering because of low oil prices. But that is where I get confused. Oil is the primary component of all goods produced ... plastics, fuel for steel furnaces, transport of all products, pretty much everything has the cost of oil factored in at some point in production. So why isn't low oil prices an actual boon to the production of everything but oil?

 

I know I must be overlooking something because low oil prices is universally considered a bad thing. But I'll be darned if I can figure out why.

[stoneam2006]

I need some help with that thought. I keep hearing this all the time when they whine about the stock market suffering because of low oil prices. But that is where I get confused. Oil is the primary component of all goods produced ... plastics, fuel for steel furnaces, transport of all products, pretty much everything has the cost of oil factored in at some point in production. So why isn't low oil prices an actual boon to the production of everything but oil?

I know I must be overlooking something because low oil prices is universally considered a bad thing. But I'll be darned if I can figure out why.

I work directly in the field of pumping and compressing oil and it's byproducts. Oil goes down they stop pumping and fall back on reserves witch in turn causes business to slow...if companies are not pumping or drilling new wells they are not buying new products.

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[Doc]

I work directly in the field of pumping and compressing oil and it's byproducts. Oil goes down they stop pumping and fall back on reserves witch in turn causes business to slow...if companies are not pumping or drilling new wells they are not buying new products.

 

Yes, falling oil prices may be a sign of a weakening economy (or an unnatural glut of oil), but falling oil prices are not a cause of a bad economy. Oil is a raw material for products, transport, and living. operating with lower overhead does anything but stifle business and economy.

 

I will say that things look a little different if you are involved directly in production. But for the vast majority of the rest of the world, I have a hard time understanding why we would ever welcome or wish for higher oil prices. That simply equates to a higher cost of living....right? Perhaps there is some economic principal there that is eluding me but I am all for low prices of any product especially something as central to the cost of goods and services. Not trying to argue .... just trying to understand.

[stoneam2006]

Yes, falling oil prices may be a sign of a weakening economy (or an unnatural glut of oil), but falling oil prices are not a cause of a bad economy. Oil is a raw material for products, transport, and living. operating with lower overhead does anything but stifle business and economy.

I will say that things look a little different if you are involved directly in production. But for the vast majority of the rest of the world, I have a hard time understanding why we would ever welcome or wish for higher oil prices. That simply equates to a higher cost of living....right? Perhaps there is some economic principal there that is eluding me but I am all for low prices of any product especially something as central to the cost of goods and services. Not trying to argue .... just trying to understand.

Yea you would think that with lower overhead production would increase in other industries but if you think about the amt of money and jobs in the oil market when oil tanks jobs are lost causing unemployment to jump causing less money to be spent in other industries. I mean look at places with huge oil markets like Texas the Dakotas and other parts of the world that boom when oil is up. Houses go up...car sales go up...welfare goes down...my job alone in small non major oil town has 75 plus out on unemployment. That's 75 more on welfare not spending money at the local diners or shops...not buying new houses or cars directly affects the local economy.

The biggest problem is oil companies have gotten so used to making billions in profits that when oil drops and profits are only millions they panic and cut jobs.. Oil could stay around 50 a barrel and stabilize there and the oil companies could keep pump gas low but maintain production and jobs.

Another problem is the amt of age 60_65 in the workforce that are not retiring causing younger family's to rely more and more on the system.

I think my shop alone we have around 100 that are retirement age but have no plans in leaving anytime soon.

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[Doc]

I guess I am taking a bit more global view of oil prices vs. the overall global economy. While the oil industry s indeed huge, the vast majority of contributors to the economy are all the users of oil who benefit from cheap raw materials such as oil. Those are the ones that expand and cause growth in times of low material costs, I would think.

[stoneam2006]

I guess I am taking a bit more global view of oil prices vs. the overall global economy. While the oil industry s indeed huge, the vast majority of contributors to the economy are all the users of oil who benefit from cheap raw materials such as oil. Those are the ones that expand and cause growth in times of low material costs, I would think.

I have found that aerospace and medical tend to thrive with low oil but most other industry's dont....it's a wierd and complex system and really all comes down to greed. Last time gas was 20 something a barrel (I realize it has risen ) what was gas price at the pump I don't know for sure but I am sure it's less than 2 a gallon but greed stops them from actually putting the price where it should be. And actually we have it pretty decent compared to alot of the world when it comes to pump prices....

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[Nomad]

https://ourfiniteworld.com/2014/12/07/ten-reasons-why-a-severe-drop-in-oil-prices-is-a-problem/ link that should help with understanding oil prices.

Dom, glad you're going back to work, my wife's company is moving to Mexico and dispite me buying her a sombrero and Rosetta Stone, she retired and is now home all day.....

This may drive me to take up,turkey hunting !

Edited March 18, 2016 by Larry302