SoylentNews

-- OriginalOwner_ [tinyurl.com] writes:

from the bad-news-for-tar-sands-workers-and-frackers dept.

Russia Today reports [rt.com]

The price of crude oil has dropped 17 percent since the beginning of the year, reaching a 12-year low of $30 a barrel. That's good news for US consumers but the oil industry is ordering layoffs and shale companies could be on the verge of bankruptcy.

On [January 12], the price of crude oil fell another 3 percent to $30.44 a barrel, according [ap.org] to The Associated Press.

[...]World oil markets are seeing a historic supply glut as production has increased in the United States, largely due to drilling techniques such as fracking and horizontal drilling. Additionally, the Organization of Petroleum Exporting Countries (OPEC) has continued to wage a price war it began in 2014 with low-cost producers in the US and elsewhere through unabated production. The glut has also been caused by falling demand for oil due to China's slowing economy.

"The starting point is the oversupply in the world market and the battle for market share among exporters", said Daniel Yergin, an energy expert and vice chairman of the IHS consulting firm, according [washingtonpost.com] to the Washington Post. "But the oil price is also being pounded down by the geopolitical rivalry between Saudi Arabia and Iran in the Middle East, and the imminent return of Iranian oil under the nuclear agreement, and, at the same time, by increasingly big worries about the Chinese economy."

Earlier on [January 12], Nigeria's oil minister said that some OPEC countries had requested an emergency meeting to consider supply cuts, Reuters reported [reuters.com]. The idea, however, was later rejected by the United Arab Emirates, sending prices tumbling.

[...]Falling oil prices reduce the profitability of oil extraction which, in turn, impacts drilling activity. In the early part of last year, the US' rig count was down 850 from the year before, while about 17,000 oil and gas workers in the US lost their jobs in 2015. When adding the oilfield support jobs lost in refineries and petrochemicals, the actual number of related layoffs grew to about 87,000, according to Michael Planet [google.com],[1] an economist at the Dallas Fed.

[1] Yeah, the link in TFA was useless too.

In quasi-related news, Common Dreams reports [commondreams.org]

Arch Coal, the United States' second largest coal supplier, [filed for bankruptcy January 11], signaling what environmentalists described as the "end of an era" as the country moves to more renewable, less-polluting energy sources.

Original Submission