Oil Prices Good Or Bad For The Economy - 1787 Words

Oil Prices; Good Or Bad For The Economy? By William Wakefield 5/11/2016 Is it true what experts say, when the price of oil drops the economy gets better, and when the price of oil rises the economy suffers? Of course as consumers we love to pay less at the gas pumps, but as we play much less now for gas then we did last year many of us are suffering due to the dramatic drop in the price of oil. As I strongly agree that the low cost of oil is hurting the economy in general, as I was one who fell victim to the recession working for an oil company up until January 2015, but fell victim to lay off due to the big drop in prices. Over 250,000 that work in the oil industry have lost their job due to the price of oil; 42 oil companies have†¦show more content†¦Foreclosures are also taking a big spike in the oil effect, states such as Texas, Oklahoma and North Dakota have seen in increase of foreclosures jump up 15.7 percent in Texas, 36 percent in Oklahoma and a stunning 387 percent jump in North Dakota. For the lucky people that were able to keep their job in the oil industry were glad they were able to keep their job, but had to take a huge hit in pay. The average pay check before the big hit was an average $1,120 a week, dropping to an average of $857 a week. So why is the price of oil so low, from once $100 a barrel, down to a stunning $40 a barrel? The answer is there is a surplus of oil in the world. There was such a long run of high oil prices that researchers and developers were inspired to find new techniques on places to find new oil and they succeeded which in return has created too much oil and the cost in a downward spiral. Since November 2015 tax revenues in Texas have plunged up to 51 percent from oil and gas production and North Dakota has seen the dip from tax revenue from oil and gas at an eye opening 43 percent. Which in return has many banks worried that if the price of oil continues to be at the low ball price that they are, we are going to see a high increase of loans by oil companies going into default and creates a squeeze on banks bottom line and will continue the strong recession that we are in as of today and by banks