toxtethogrady Posted February 9, 2015 Author Share Posted February 9, 2015 Oil appears to be up again today. WTI is over $53 a barrel. It means gas at the pump is starting to move back over $2 a gallon. Oh, well, it was a fun party while it lasted. Now, can someone tell this to the banks that just redlined Houston? Link to comment Share on other sites More sharing options...
UtterlyUrban Posted February 10, 2015 Share Posted February 10, 2015 Oil appears to be up again today. WTI is over $53 a barrel. It means gas at the pump is starting to move back over $2 a gallon. Oh, well, it was a fun party while it lasted. Now, can someone tell this to the banks that just redlined Houston?Also today, Citi analysts, if I recall, called this a "head fake" and are suggesting oil at $20-ish per barrel this fall.....OPEC suggested today that demand this year is actually going to be 400,000 BPD more than estimated last fall.The only thing that is certain is uncertainty and that will keep the "redline" in place for now. Link to comment Share on other sites More sharing options...
august948 Posted February 11, 2015 Share Posted February 11, 2015 Apparently there isn't quite as high of a demand as previously thought of... Forbes and a few other publications spell it out (I'm way too lazy to post them right now). There is perception that engineers are wanted everywhere. Houston supposedly has the highest concentration of them anywhere in the US? I think we have the highest concentration of "engineer-like" degrees, not engineers themselves. I'll wager LA and NYC by virtue of having more people have more engineers? But that's me being obstinate. That said: I fully expect engineers/geologists/phyicistsphysicists/others with degrees get let go with this round of layoffs. Roughnecks and roundabouts (and whatnot) will also (or already do) find themselves laid off. The bigger issue is why, and why so suddenly? I still maintain that oil/gas companies have failed to properly protect themselves from something like this. I mean we're not talking about an alternative energy source discovered overnight - we're talking about overproduction - years of it! And there were/are people sitting high up in offices atop towers that said it would happen and did nothing. That's my issue. And in 10 years it will repeat. Only in Oil/Gas does this seem to happen again..and again...and again...and again...and again...and again... *I can't spell for a durn today!* In 10 years there will be a new crop of top managers in place. When they see profits and bonuses go through the roof, they push it harder to make more for investors and themselves. Frequently, they are near the end of their careers and can take a cushy retirement when things eventually go south. Short-term management thinking was old news back the '80's when I was in business school. Link to comment Share on other sites More sharing options...
Ross Posted February 11, 2015 Share Posted February 11, 2015 That said: I fully expect engineers/geologists/phyicistsphysicists/others with degrees get let go with this round of layoffs. Roughnecks and roundabouts (and whatnot) will also (or already do) find themselves laid off. The bigger issue is why, and why so suddenly? I still maintain that oil/gas companies have failed to properly protect themselves from something like this. I mean we're not talking about an alternative energy source discovered overnight - we're talking about overproduction - years of it! And there were/are people sitting high up in offices atop towers that said it would happen and did nothing. That's my issue. And in 10 years it will repeat. Only in Oil/Gas does this seem to happen again..and again...and again...and again...and again...and again... *I can't spell for a durn today!* A lot of that is driven by the nature of asset acquisition. A company goes out and leases as much acreage as possible, because if they don't it won't be available later. Those leases have terms that require work be done with in a relatively short time, so enough personnel to accomplish that work have to be hired. If discoveries are made, then drilling starts in earnest, and rigs are hired, pipelines built, etc. This continues until all acreage possible is tied up with production. Once the acreage is held by production, any economic burp that causes prices to drop makes it possible for the companies to drop many of the personnel they had hired. Link to comment Share on other sites More sharing options...
Slick Vik Posted February 11, 2015 Share Posted February 11, 2015 Lot of layoffs that arent even being announced because they are contractors. Link to comment Share on other sites More sharing options...
ArchFan Posted February 11, 2015 Share Posted February 11, 2015 As in the case of my company, I suspect that some of those invisible layoffs of individual "contractors" are the result of their employers (e.g., CSC) not getting their contracts renewed. Employees of competing firms (perhaps even the same individuals, in some cases) are filling the jobs that replace them. Link to comment Share on other sites More sharing options...
Triton Posted February 15, 2015 Share Posted February 15, 2015 Looks like we made national news today: http://www.businessinsider.com/oil-bust-hits-office-construction-2015-2?nr_email_referer=1&utm_source=Sailthru&utm_medium=email&utm_term=Business%20Insider%20Select&utm_campaign=BI%20Select%20Weekend%202015-02-15&utm_content=BISelect Link to comment Share on other sites More sharing options...
LTAWACS Posted February 16, 2015 Share Posted February 16, 2015 So... It's not that bad then, right? Link to comment Share on other sites More sharing options...
DrLan34 Posted February 25, 2015 Share Posted February 25, 2015 http://www.bizjournals.com/houston/morning_call/2015/02/chevron-to-move-jobs-to-houston.html The San Ramon, California-based company said Feb. 20 it will move 100 jobs from its corporate headquarters to Houston in 2015, the San Jose Mercury News reports. Link to comment Share on other sites More sharing options...
LTAWACS Posted February 25, 2015 Share Posted February 25, 2015 Well this is good news. The more jobs that move here the better. Link to comment Share on other sites More sharing options...
jgriff Posted February 26, 2015 Share Posted February 26, 2015 NM I probably said too much... Link to comment Share on other sites More sharing options...
Slick Vik Posted February 26, 2015 Share Posted February 26, 2015 Article in chronicle today highlights the fact that 22.5% of houstonians live under the poverty line. That's what nobody talks about.http://www.houstonchronicle.com/opinion/editorials/article/Two-faces-6101793.php Link to comment Share on other sites More sharing options...
arche_757 Posted February 26, 2015 Share Posted February 26, 2015 Article in chronicle today highlights the fact that 22.5% of houstonians live under the poverty line. That's what nobody talks about.http://www.houstonchronicle.com/opinion/editorials/article/Two-faces-6101793.php Sadly - quite a few Americans in general live below the poverty line. 14.5% nationally.https://www.census.gov/hhes/www/poverty/about/overview/ This is abosultely a huge problem for this region. Imagine if this slowdown lasts longer than 1-2 years.... I've long worried what might push Houston to be the "next" Detroit, I think a huge slowdown in the largest employment sector + recent surge in population (with a lot of poverty stricken folks among them) would be a step. This is a great reason we need to further diversify the economy. Poverty will only get worse! Link to comment Share on other sites More sharing options...
samagon Posted February 27, 2015 Share Posted February 27, 2015 Look at population numbers for Detroit since 1950 when they peaked. They have been steadily declining from nearly 2,000,000 to under 1,000,000. So unless all the people who can afford to move up and leave all the people who can't move, Houston won't become Detroit. Link to comment Share on other sites More sharing options...
strickn Posted February 27, 2015 Share Posted February 27, 2015 Detroit proper peaked before Wayne County (1970), peaked before the Wayne-Oakland-Macomb core counties population (2000), while the metro with exurban counties still haven't peaked. So, not to dispute your original point, even if Houston does become Detroit it will take generations to come down the pike. Link to comment Share on other sites More sharing options...
arche_757 Posted February 27, 2015 Share Posted February 27, 2015 ^Detroit is a unique example. I suppose I should have typed "...worried about Houston heading the way of the rust belt cities and towns..." ? Link to comment Share on other sites More sharing options...
Montrose1100 Posted February 27, 2015 Share Posted February 27, 2015 The only way we could turn into Detroit would be an even greater slump in the oil prices, and if the whole world went to electric or fusion transportation. Also if plastics were banned world wide. Link to comment Share on other sites More sharing options...
arche_757 Posted February 27, 2015 Share Posted February 27, 2015 The only way we could turn into Detroit would be an even greater slump in the oil prices, and if the whole world went to electric or fusion transportation. Also if plastics were banned world wide. That's sort of oversimplifying things isn't it? I mean we actually increased our consumption of automobiles every decade since their inception and yet the auto industry (largely based in Detroit) tanked that city when foreign competition+recession+failed housing/civic policies (which contributed to poverty) all came together. Houston would really suffer if non-fossil fuel based energy alternatives became the norm even in just the US, but plastics production alone wouldn't keep Houston's "fossil fuel based companies" afloat. Far from it I'd wager. Look, I'm not saying we're the very next Detroit - I'm just saying I think if we don't make efforts in the next 20 years to "right the ship" so to speak we're going to enter into some unfortunately rough waters ahead when oil is challenged by all sorts of issues. Kind'a like New Orleans clinging to Cotton too long. Yeah, people still wear clothes made of it more than any other time in history... but. Well. Link to comment Share on other sites More sharing options...
Houston? Posted February 27, 2015 Share Posted February 27, 2015 Will Chevron be letting go 10-13K? Link to comment Share on other sites More sharing options...
arche_757 Posted February 27, 2015 Share Posted February 27, 2015 Who knows? Why? I rambled in my previous post (as I tend to do) but the point remains that Houston needs to further diversify the economy - no reason we should have a slump while the rest of the economy (nationally) starts to really ramp up. Eventually there will be lesser need for oil/fossil fuels. Maybe not till 2100? Maybe beyond? But then again in 1915 could anyone have predicted that by 1945 we would have discovered nuclear power? Or that by the 1960s flying jets across oceans without trouble? And who in 1960 would have been able to even remotely imagine the internet, and to a further extent: Google? No one. Time marches on... Link to comment Share on other sites More sharing options...
plumber2 Posted February 28, 2015 Share Posted February 28, 2015 http://www.bizjournals.com/houston/morning_call/2015/02/chevron-to-move-jobs-to-houston.html The San Ramon, California-based company said Feb. 20 it will move 100 jobs from its corporate headquarters to Houston in 2015, the San Jose Mercury News reports.That may be good news for Houston, but as an economy as a whole this type of jobs relocation means nothing. No permanent jobs are created. Nothing was produced. Nothing new was invented. No competition to see who has a better product. Just sliding one asset from one side of the table to another. Well, maybe the moving companies and real estate compnaies made a little bit out of the deal, but the net gain on the whole economy is nothing. Link to comment Share on other sites More sharing options...
arche_757 Posted February 28, 2015 Share Posted February 28, 2015 That may be good news for Houston, but as an economy as a whole this type of jobs relocation means nothing. No permanent jobs are created. Nothing was produced. Nothing new was invented. No competition to see who has a better product. Just sliding one asset from one side of the table to another. Well, maybe the moving companies and real estate compnaies made a little bit out of the deal, but the net gain on the whole economy is nothing.That's 100 families who need homes. Aside from that and the moving companies you mentioned it won't be a big deal. Not for Inner Loop Houston at least. Now if this was Huntsville or even Galveston - big news. Link to comment Share on other sites More sharing options...
placoors Posted March 1, 2015 Share Posted March 1, 2015 Interesting NYT piece: http://mobile.nytimes.com/2015/03/01/opinion/sunday/as-oil-prices-fall-houston-shudders.html?referrer=&_r=1 Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 1, 2015 Share Posted March 1, 2015 There are reports of $20 oil this year for a protracted time before moving higher.There are reports that the current price is "about right" for a protracted time.There are reports of $70 oil this year for a protracted time before moving even higher Who is right?I don't know.What I do know is that if one of the first two items listed actually happens, Houston will face significant problems. All the talk about "ports and doctors" earlier in this thread will mean nothing if houston faces oil prices in the $20's and $30's for, say, 2 years. Link to comment Share on other sites More sharing options...
Dakota79 Posted March 2, 2015 Share Posted March 2, 2015 I thought this had some good points. https://www.bisnow.com/national/news/commercial-real-estate/5-reasons-not-to-worry-about-cre-43429?single-page#ath Link to comment Share on other sites More sharing options...
arche_757 Posted March 2, 2015 Share Posted March 2, 2015 ^It does. The problem for most of us - we don't have the financial backing of a TrammelCrow. 2 bad years will tank many families. 2 bad years will cause architectural/engineering/construction firms that *just* weathered the 2008-2010/11 recession (the worst since the Depression for AEC companies) to go belly up. Frankly I'm concerned, and my firm doesn't do anything that's directly connected to oil/gas. Houston's slow-down hurts all that are in construction. That's a fact. Hopefully the new schools/retail/hospitals etc. that are needed for all these new people will keep most of us busy for the next year or two? Link to comment Share on other sites More sharing options...
jgriff Posted March 2, 2015 Share Posted March 2, 2015 I just got out of a meeting where I was informed that an HDPE project we were bidding on has been canceled due to low oil prices. There goes the theory that oil prices don't affect downstream projects. Link to comment Share on other sites More sharing options...
Dakota79 Posted March 2, 2015 Share Posted March 2, 2015 I just got out of a meeting where I was informed that an HDPE project we were bidding on has been canceled due to low oil prices. There goes the theory that oil prices don't affect downstream projects.What's HDPE? Link to comment Share on other sites More sharing options...
Houston19514 Posted March 2, 2015 Share Posted March 2, 2015 I just got out of a meeting where I was informed that an HDPE project we were bidding on has been canceled due to low oil prices. There goes the theory that oil prices don't affect downstream projects. What's HDPE? High Density Polyethylene. I've been trying to come up with a rationale for canceling a project because the feedstock prices have dropped. Wouldn't that make the project all the more feasible/lucrative? (Unless of course this particular project was targeting the O&G industry as its customer.) Link to comment Share on other sites More sharing options...
swtsig Posted March 2, 2015 Share Posted March 2, 2015 High Density Polyethylene. I've been trying to come up with a rationale for canceling a project because the feedstock prices have dropped. Wouldn't that make the project all the more feasible/lucrative? (Unless of course this particular project was targeting the O&G industry as its customer.) or there are supply issues in the mid-to-long term, perhaps? i really don't know but it's infinitely more complex than current market prices. remember, many of these project have to project 3-5 years into the future. Link to comment Share on other sites More sharing options...
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