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re: Prices Fall to a Six-Year Low for U.S. Oil
Posted on 3/17/15 at 9:11 am to TheCaterpillar
Posted on 3/17/15 at 9:11 am to TheCaterpillar
quote:
Non-O and G people actually get cheaper goods and services from this, leaving them with more spending money or savings.
No one is denying that low oil prices free up money in peoples pockets. What we are saying is that in certain areas, the economy is invested deeply in the oilfield (i.e. all along Hwy 90 in Louisiana). Price of goods being low in those areas isn't going to be that beneficial if unemployment is around 25%. It's going to hurt in those towns as the oil and gas workers are a big part of the economic spending.
Big picture, yes, cheap gas is good for everyone. Small scale for South LA and Texas, not so good.
2
Posted on 3/17/15 at 9:14 am to KG6
quote:
No one is denying that low oil prices free up money in peoples pockets. What we are saying is that in certain areas, the economy is invested deeply in the oilfield (i.e. all along Hwy 90 in Louisiana). Price of goods being low in those areas isn't going to be that beneficial if unemployment is around 25%. It's going to hurt in those towns as the oil and gas workers are a big part of the economic spending.
He said all of Louisiana and Texas. Not towns along Hwy 90.
Also, if other companies have lower manufacturing and shipping costs it helps their bottom line and allows them to hire more workers. That helps balance the unemployment, although I admit in heavy OandG towns it won't recoup all of the jobs, or even half.
However, major cities like Baton Rouge, New Orleans, Houston, etc. are diversified enough to not be negatively affected to the point of alarm.
Posted on 3/17/15 at 9:14 am to KG6
There a lot of people with high salaries that are tied to oil and gas. Where do think they spend their money? On amazon? No, they spend it at the local grocery, the truck stop, local car dealerships, etc. That influx of money is what is at stake. How does all that affect the Joe Schmo individual? Probably not a ton but it will be felt in the aggregate. Also need to consider taxes which find things like roads and schools.
This post was edited on 3/17/15 at 9:15 am
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