From a construction guy who builds everything from national chain retail boxes in the city to mancamps in the oilfields not only do I disagree, but I will say you are comparing apples and lawnmowers.
How are low oil prices affecting your business/trade?
- Thread starter WolfLMM
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From a construction guy who builds everything from national chain retail boxes in the city to mancamps in the oilfields not only do I disagree, but I will say you are comparing apples and lawnmowers.
they make money till around 15 a barrel so they got awhile
if oil was 85-95 a barrel that'd be a happy medium. if everyone in the generals public saw what it takes to get it from 10,000 down to the gas pump they think its cheap at 3-4 bucks a gallon
I read an internal report from one of our customers (a heavy hitter) that they(opec) actually lose money on anything less than 70 a barrel. Who knows though.
While those are big numbers and it is a huge industry, it's still only a fraction of the pie in terms of overall employment in the US. I mean crap, there's almost 120M people employed in the US as of Dec. 2014. There's no way all 9.8M people in the O&G & supporting industry are going to be adversely effected. Heck, the industry won't even be cut in half. But if it is, that's still only 4% of all full-time employed people adversely effected as compare to the 96% that will be positively effected by the down turn.
Am I missing something?
Regardless, I feel bad for anyone who loses their job when they're doing their best to survive and provide for themselves and their family. It really is sad and I'm grateful it's not me.
obviously you didn't work yourself into a corner market in construction by build only build Y items... which is exact opposite of what I have seen people venting about.. where they cater so heavily to once source that source dries up or slows down they panic almost.
seen it with truck companies that where not out constantly seeking new customers to work with.
I completely understand the "make hay while Sun is shinning" but don't forget the other fields because sun doesn't always shine through the clouds..
the companies that least learned how to make a profit when the industry got lean, then buy the ones that didn't and went under
Why does it need to be 80-90/bbl now when it didn't have to be 10-15 years ago when prices at the pump were similar to where they're at now? Has the means of retrieval changed so much that it's just that expensive to extract the crude now? Has the middle east changed their way of extracting the crude or is still plugging along like they basically always have?
Could it be that the required price per bbl is now as high as it is due to the average wage in the industry being nearly double that of the national average wage earner? That's not a jab, it's an honest/legitimate question.
Could it be that the required price per bbl is now as high as it is due to the average wage in the industry being nearly double that of the national average wage earner? That's not a jab, it's an honest/legitimate question.
Cause everything else costs more now. Tooling up to support a contract is extremely expensive. Can easily runs into the 10s of millions even for a small company like ours.
And Adam, no one in this thread has worked themselves into a corner.
Setting up a plant to produce parts requires lots of thinking/engineering on the layout of machinery, who calls on us the most? Who puts bread on the table? So it's not like you can just swap back and fourth whenever the wind changes direction. Our plant doesn't soley rely on oil and gas, but when that's who's been feeding you large amounts of business for 30 years, you cant just say, "hey I'm sorry I have to cater to aerospace and defense contractors for a while so we will get back with you later". No that's not how it works. When your main customer, the one that's made you who you are, calls up and says I need these parts now, you say yes sir and get it down.
And btw, I'm not complaining at all. Ups and downs are part of business. I just started this thread to gather thoughts from people in other fields. But it seems that there is quite a lot of confusion on just how important the oil industry is.... It makes the world go round dude.
ive been "pigeon toed" in the industry for 15 very good years, we are diverse, we are doing very well through all this. This was not about how to diversify to survive the oil prices, been there done that. I know how the game is played. This will be my 3rd oil price storm ive had to weather. Its the opinion that people have about the impact of the industry that I don't get. But I guess if life is good from were you stand and its 25$ to fill up your puckup, then so be it. I think only the guys who live and work in the energy sector see it the same way I do.
Like I said earlier, if you only pay attention to what's on the surface, then no, Your not missing anything.
understood..
i know the truck companies are likening the price drop in fuel...
i know my weekly operating cost has gone from ~1800-2000 weekly when diesel was $4 to 1200-1400 with prices floating 2.75-3.00 that ~500-600 adds up quickly!
same princple applies to the avg person at the pump.. goes from spending 100-150 a week in fuel to 50-75 (or less) a week that's an extra ~200 a month that can be spent else where...it adds up.
Fracking cost a lot more then traditional wells that's why we need 80-90 also the dollar is worth less the it was 15 years ago.
Then add in the cost of meeting ever increasing EPA regs for the refineries, not only the cost of new equipment but gas, diesel, and oil that needs more refining to meet the different teirs.
Don't underestimate it.
I was talking to a local performance shop today and the owner said he is losing 20-30% of his customers due to the O&G market dropping out. While employees of the oil and gas market make a good chunk of money, they also spend a good amount. Everything is tied into it. Its ridiculous to say that it is a niche.
Unless you are in the business I doubt you can see the full spectrum of what goes into it. Its all fine and dandy from the outside looking in.
They make money at single digits...
That's not what I've been told. My source is a very very large US company.
I got that from George Bush Sr's retired CIA briefing officer. He is a customer, for your sake I hope he was wrong but the prices for the militrary are set years in advance and that's where he said he gets his info...
Its taking a toll on refiners also. I know corporate has put a halt to a lot of new projects that were in the works. Crack spreads are terrible right now, profits are dwindling. With that being said I think that my job here will be OK through it all