Monday, January 18, 2016
If you gone to fill up your gas tank recently, you’ve surely noticed that gas prices are continuing to drop. This decline is tied to the dropping cost of oil, which has, in turn, started to put a serious strain on the oil industry. Market conditions have declined so much, in fact, that many are starting to wonder whether it is going to need a bailout similar to the ones the banks received not too long ago.
This all started a while back with the advancement of shale technology.
Oil companies here in the United States started to put it to work, and while results and have been plentiful, the market impacts have been disastrous.
Crude oil prices started the year by continuing to decline to a 12-year low at below $30 a barrel and there are many signs that the likelihood
that price might increase are very scarce.
This has led to the loss of thousands of jobs, which isn’t good considering the energy industry had already suffered 130,000 job losses in 2015. This is the result of lower spending from the oil companies, a trend that is more than likely going to continue until something changes.
The current state of the oil industry has also led to numerous bankruptcies and has caused the global market to start to worry. Oil-rich states like Texas, Oklahoma and North Dakota has seen home foreclosures spike and overall economic growth has become stagnant.
If a bailout comes, says Business Insider, it would be modeled if it worked for the banks and auto industries, it would surely work for the oil industry. At the moment, there is no proposed legislation for a bailout, but members of Congress are likely to discuss the matter soon and address the declining state of the industry.
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- global oil market
- oil industry bailout
- oil market conditions