Notley effect reaches far......
Back when the oil money flowed, the Location 581 Saloon would be crammed with pipefitters, welders, derrickhands, truck drivers and all sorts of oilfield workers – as many as 35 of them a night together shelling out more than $2,000 for drinks and good times.
These days, the bar in this South Texas city 50 miles southwest of San Antonio sits mostly empty, except for a few locals. On a recent early evening, three clients sat at the bar. Only two were drinking.
“It’s just like a ghost town again,” said Troy Reeves, the bar’s owner.
Pearsall, like other towns that sit atop of the Eagle Ford Shale and soared during the recent oil boom, has had a harrowing crash back to Earth, as the price of crude has plummeted.
Crude’s free fall has rattled world markets, erased billions of dollars in stocks worldwide and led to thousands of layoffs in the oil and gas sector. But the steady march of declining prices – with no end in sight – and recent news that lifting of sanctions on Iran could deliver even more oil to the market has nudged the outlook in South Texas from depressed to near desperate.
Those who put their money in hotels and RV parks to house the deluge of oilfield workers that came during the boom are losing money fast as those workers were let go, Philips said. “Those people are sweating bullets right now,” he said. “There’s a tremendous amount of bankruptcies about to take place.”
Ironically, Eagle Ford Shale’s success and the technology used to unlock millions of barrels of oil stuck in previously unreachable crevices contributed to the oil glut and low prices. Other factors include China’s faltering economy, Saudi Arabia’s unwillingness to scale back its own production and overall weaker global demand.
Texas has experienced oil busts before, most memorably in the mid-1980s, when crude fell to under $10 a barrel and bankrupted towns across the state. This one feels similar to that bust in its length and global impact, said Scott Tinker, director of the Bureau of Economic Geology at University of Texas at Austin.
“This one is deeper and longer than the other ones in 1999, 2007, 2009,” he said. “And we haven’t seen signs of the bottom yet.”
more
http://www.usatoday.com/story/news/2016/01/20/texas-oil-prices-boomtowns-crash/79086400/
Back when the oil money flowed, the Location 581 Saloon would be crammed with pipefitters, welders, derrickhands, truck drivers and all sorts of oilfield workers – as many as 35 of them a night together shelling out more than $2,000 for drinks and good times.
These days, the bar in this South Texas city 50 miles southwest of San Antonio sits mostly empty, except for a few locals. On a recent early evening, three clients sat at the bar. Only two were drinking.
“It’s just like a ghost town again,” said Troy Reeves, the bar’s owner.
Pearsall, like other towns that sit atop of the Eagle Ford Shale and soared during the recent oil boom, has had a harrowing crash back to Earth, as the price of crude has plummeted.
Crude’s free fall has rattled world markets, erased billions of dollars in stocks worldwide and led to thousands of layoffs in the oil and gas sector. But the steady march of declining prices – with no end in sight – and recent news that lifting of sanctions on Iran could deliver even more oil to the market has nudged the outlook in South Texas from depressed to near desperate.
Those who put their money in hotels and RV parks to house the deluge of oilfield workers that came during the boom are losing money fast as those workers were let go, Philips said. “Those people are sweating bullets right now,” he said. “There’s a tremendous amount of bankruptcies about to take place.”
Ironically, Eagle Ford Shale’s success and the technology used to unlock millions of barrels of oil stuck in previously unreachable crevices contributed to the oil glut and low prices. Other factors include China’s faltering economy, Saudi Arabia’s unwillingness to scale back its own production and overall weaker global demand.
Texas has experienced oil busts before, most memorably in the mid-1980s, when crude fell to under $10 a barrel and bankrupted towns across the state. This one feels similar to that bust in its length and global impact, said Scott Tinker, director of the Bureau of Economic Geology at University of Texas at Austin.
“This one is deeper and longer than the other ones in 1999, 2007, 2009,” he said. “And we haven’t seen signs of the bottom yet.”
more
http://www.usatoday.com/story/news/2016/01/20/texas-oil-prices-boomtowns-crash/79086400/
