Oil Prices Predictions for Louisiana Economy

The price of oil is dropping and so is the price of gasoline. Everyone is excited to put two dollars a gallon of gas in their tanks, but there is nervous chatter in the offshore community. The state depends heavily on the oil industry to maintain a strong economy. So as gas continues to dip in price, will the industry experience major lay-offs?

The President of the Louisiana Oil and Gas Association, Don Brigg, is preparing to give a speech at the Petroleum Club in Lafayette on January 14th. The topic is the state of the industry in Louisiana.

“The market’s changing so quickly right now,” he began. “Saudi Arabia is doing a direct assault against the oil producers in the United States. Their whole intention is to drive out marginal oil producers to regain their market share. Oil was 110 dollars a share in June. Now it’s 55.”

The U-S, according to Briggs, was producing as high as nine million barrels of oil at one point. Now, production could slip to seven million barrels or lower as the country and Louisiana see a decline in drilling activity.

“It’ll have an impact. I mean budgets are being looked at and readjusted.”

He believes most companies will see a 40 percent cut in their budgets, but he’s optimistic it won’t mean 40 percent fewer jobs.

“Companies I’ve talked to aren’t talking about layoffs, they are just talking about pulling back a little bit.”

It could take a year or so for the back and forth market share battle with other oil producing countries to taper off. Briggs said some smaller companies could experience major losses. He reminded the public however, this is not the first time the American oil industry has been drilled into a corner.

“When the smoke clears, we will be standing here, just like we always have.”

 

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