Posted on 01/13/2015 1:55:20 PM PST by tcrlaf
For all those who have forgotten that the I in the GDP equation stands for Investment, here is a reminder courtesy of the latest crude collapse victim, Suncor, which moments ago announced it is not only cutting its 2015 CapEx by $1 billion (as in I, directly and adversely impacting US GDP by the same amount) but that it would also cut "operating expenses" by up to $800 million, and, drumroll, implementing "a series of workforce initiatives that will reduce total workforce numbers in 2015 by approximately 1000 people, primarily through its contract workforce, in addition to reducing employee positions. There will also be an overall hiring freeze for roles that are not critical to operations and safety."
Or as Joe LaVorgna and all the other mainstay CNBC "analysts" would call it, "unambiguously good."
From the press release:
Suncor Energy Inc. announced today significant spending reductions to its 2015 budget in response to the current lower crude price environment. The cuts include a $1 billion decrease in the company's capital spending program, as well as sustainable operating expense reductions of $600 million to $800 million to be phased in over two years offsetting inflation and growth.
(Excerpt) Read more at zerohedge.com ...
Well, it looks like the Tar Sands are done. The Canadian Economy may very well be looking into the abyss, now.
Interesting to note, in 2013, Warren Buffet invested half a BILLION dollars in Suncor.
Chump change for him.
It’s okay, we can uses the consumer savings from the price drop to buy more cheap imports from China. /S
It’s okay, we can uses the consumer savings from the price drop to buy more cheap imports from China. /S
Done? Not hardly, cutting back from $7.5 billion to $6.5 billion is hardly closing shop.
A wise move by management. You got to do what you got to do to protect your shareholders. A little sad because these are good jobs proving a needed resource. Yet Disney stock continues to climb on all the shit it produces on Disney XD that the kids seem to like, but frankly I find pure crap.
Looks to be a blood bath. We just don’t know how long.
Thanks for the additional info. What is their total workforce? They seem to only want to tell half of the story. Is that a 15% reduction in their workforce also?
I found on Wikipedia that they employed 13,026 people in 2011. Roughly 7.5 %.
How is it a blood bath? The fact that crude is getting back down to where it is actually affordable to the “CONSUMER” the money not pissed away to the oil companies will stay in the pockets of the “CONSUMER” what a novel idea ? So they cut back on expansion fueled by false inflated prices from speculation and some lose their jobs ...what is wrong with free market principles? Are these workers to be treated like the hacks that push F__kin paper and treat WE THE “EMPLOYER” like crap and know they will never lose their overpaid (with benefits) job that most who employ them cannot obtain?...no sympathy here oil should not go above 50 per bbl. Watch how the economy will benefit as costs on everything settles down and we can hopefully breathe again. These propaganda pieces from the media about how terrible it is that oil is where it should be is laughable. Drill baby DRILL!
“How is it a blood bath? The fact that crude is getting back down to where it is actually affordable to the “CONSUMER” the money not pissed away to the oil companies will stay in the pockets of the “CONSUMER” what a novel idea ? So they cut back on expansion fueled by false inflated prices from speculation and some lose their jobs ...what is wrong with free market principles? Are these workers to be treated like the hacks that push F__kin paper and treat WE THE “EMPLOYER” like crap and know they will never lose their overpaid (with benefits) job that most who employ them cannot obtain?...no sympathy here”
As you wish.
The price of oil getting to a certain range has fueled the drilling boom and increase in domestic production. Yes, this activity has created a lot of well paying American jobs in North Dakota, Pennsylvania, Texas, and elsewhere, and the spinoff has been a boon to the economy.
You are right that the consumer benefits when the price drops. But much of the pricing has to do with what OPEC decides to do with its output. That’s cartel pricing, not the free market.
Meanwhile, enjoy the savings at the gasoline pump. I am. But I’m not as giddy as you apparently are at the loss of American jobs.
The oil business isn't a charity. It is business to make money, like all business. And investors are not going to put +$10 million into a single well that don't turn a profit. At $50 a barrel, many of the shale wells that started growing the US production, won't be profitable.
It is not propaganda, it is reality.
Oil may well stay in this range for a while. The drilling will fall off. The production from the existing wells will fall off. The total supply will drop. The demand will climb at these prices. And the roller coaster ride will continue.
Said the buggy whip manufacturer to the Automaker.
Who do you see as the Automaker in the current situation? OPEC?
In todays world if somebody only knows one job they're in big trouble anyway.
And btw, it’s not Oil costing us full time jobs.
Can you point to the job boom in the US from past drops in gasoline price? This isn’t the first bust cycle.
You have not seen the thousands being laid off already?
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