Trump seeks plan to help oil industry survive downturn
Bloomberg/Fuel Fix:
The fallout from the decline in oil prices will probably be much broader than the current job losses in the industry. A lot of people are going to find that they were "in the oil business" and did not know it.
It will impact many retail outlets and also everything from real estate to car and truck dealers. People will find that in many cases the value of their homes will shrink until the industry recovers. Land developers will find the market for their developments will shrink.
It will also impact finance operations that serviced the companies and their employees.
Many Texans will discover that the Democrats' desire to do away with the fossil fuel business will have a substantial negative impact on them regardless of the jobs they have.
President Donald Trump said his administration is working on a plan to make money available to the oil industry to prevent the loss of jobs after prices plunged below zero.There is more.
“We will never let the great U.S. Oil & Gas Industry down,” Trump said in a tweet on Tuesday. “I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!”
The oil and gas industry shed nearly 51,000 drilling and refining jobs in March, a 9% reduction that is likely to get worse as prices plunge.
March’s job losses rise by 15,000 when ancillary jobs such as construction, manufacturing of drilling equipment and shipping are included, according to BW Research Partnership, a research consultancy, which analyzed Department of Labor data combined with the firm’s own survey data of about 30,000 energy companies.
West Texas Intermediate plunged below zero on Monday for the first time in history with the contract for May nearing expiration, leaving traders in a panic as they tried to avoid taking delivery of physical barrels. On Tuesday the losses spread to the next month -- highlighting the massive glut in the market causing the rout rather than any technical quirk.
Energy stocks pared their decline following Trump’s tweet. The Standard & Poor’s 500 Energy Index was down 1.9% at 9:54 a.m. in New York after tumbling as much as 4.4%.
The Trump administration has spent weeks looking for ways to help independent oil companies battered by the price rout.
The Energy Department already has drafted a plan to effectively compensate those companies for halting oil production by buying their untapped crude reserves and making them part of the U.S. government’s emergency stockpile. Under the plan, the government would essentially buy the oil locked underground but ask producers to hold off on extracting or delivering it.
Federal law authorizes the Energy Department to set aside as much as 1 billion barrels of oil for emergencies, but the agency has only used about two thirds of that capacity with crude stashed in a complex of salt caverns along the Gulf Coast. That creates the opening for the new keep-it-in-the-ground approach to oil reserves.
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The fallout from the decline in oil prices will probably be much broader than the current job losses in the industry. A lot of people are going to find that they were "in the oil business" and did not know it.
It will impact many retail outlets and also everything from real estate to car and truck dealers. People will find that in many cases the value of their homes will shrink until the industry recovers. Land developers will find the market for their developments will shrink.
It will also impact finance operations that serviced the companies and their employees.
Many Texans will discover that the Democrats' desire to do away with the fossil fuel business will have a substantial negative impact on them regardless of the jobs they have.
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