The Downside Of Cheap Oil
Although the drop in gas prices brings many Americans a great deal of joy when they arrive at the pump, low oil prices isn't net good to the U.S economy. Very little of the downside is acknowledged in the financial press-until now. Falling oil prices are affecting everything from oil services companies to state budgets. Texas, which has rode the oil boom for a decade has seen it's state payroll reduced by 125,000 due to the price of oil. Texas has also seen the number of drilling rigs decrease since oil service companies like Baker Hughes and Halliburton are experiencing cutbacks in oil exploration. Last month oil services giant Schlumbeger announced it could see at many as 20,000 layoffs by June of this year. Baker Hughes announced that it was closing a plant in Texas and laying off 110. Low oil prices have geo-political consequences as well. Russia which has been battling a plummeting ruble due to western sanctions surrounding it's incursion into Ukraine, needs oil to h