How are low oil prices affecting your business/trade?
- Thread starter WolfLMM
- Start date
As a business owner but not in the O&G field I can see this from pretty much everyone's angle. I completely agree that the hit to the O&G industry sucks for anyone impacted immediately and it will ripple out and hurt other business's. But the lower prices at the pump and higher profit margins for any other business will also ripple out and help people.
As was mentioned the O&G industry has enjoyed wages that are well over the national average for any comparable job. Basically with oil prices high there is so much money coming in that companies are fine with paying higher wages than would be paid for a comparable job in another industry. They are willing to pay higher prices to all of their supporting industries so that they get preferred treatment and get their machined parts faster for example, those shops become more profitable and pay higher than average to their machinists and so on. Basically high prices and profits rippled out into all the supporting industries and jobs.
So while the rest of the industries took huge hits years ago and had to figure out ways to buckle down and work on narrow profit margins and their employees got laid off and sat unemployed until there were enough of them competing for the jobs that were left that the average wages for their job went down, while getting to work kept costing them more and more. So I see that as the price of fuel has gone up, cost to do just about any business (because as you pointed out we all use oil) went up, so products and services had to increase in price, again hurting the lower paid guys. So people had to figure out how to buckle down and live on lower wages and higher prices for everything and welcome a little break at the pump that they hope will trickle down to lower costs on other products.
I guess to sum it up I see you guys mentioning prices that Saudi's can make money at on crude and that the US has to sell for 5 times as much to be able to make money. If everyone in the O&G field were paid closer to what the average comparable job in another field gets paid how much would that number come down?
As was mentioned the O&G industry has enjoyed wages that are well over the national average for any comparable job. Basically with oil prices high there is so much money coming in that companies are fine with paying higher wages than would be paid for a comparable job in another industry. They are willing to pay higher prices to all of their supporting industries so that they get preferred treatment and get their machined parts faster for example, those shops become more profitable and pay higher than average to their machinists and so on. Basically high prices and profits rippled out into all the supporting industries and jobs.
So while the rest of the industries took huge hits years ago and had to figure out ways to buckle down and work on narrow profit margins and their employees got laid off and sat unemployed until there were enough of them competing for the jobs that were left that the average wages for their job went down, while getting to work kept costing them more and more. So I see that as the price of fuel has gone up, cost to do just about any business (because as you pointed out we all use oil) went up, so products and services had to increase in price, again hurting the lower paid guys. So people had to figure out how to buckle down and live on lower wages and higher prices for everything and welcome a little break at the pump that they hope will trickle down to lower costs on other products.
I guess to sum it up I see you guys mentioning prices that Saudi's can make money at on crude and that the US has to sell for 5 times as much to be able to make money. If everyone in the O&G field were paid closer to what the average comparable job in another field gets paid how much would that number come down?
Last edited:
