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Show Oil prices drop as area unempBoyETienU1 increases I,, Sl rhriltinn continue to ;o dou n nt the idYird times for oil companies fMC iiiMlil,s oontiiuie to l't ,if in the oil iiuiustrv in Umt.ih H"v jre commS in droves. With the j s jt-veraiu-e tax merease and M-Ktsf011' ;nv Minp.iiiies are scared. Unemployment in the hViin is runniniS in excess of 1 1 . ,nd conditions suggest that -ji may hlnt r frt, ar siime oil industry analysts who predict oil prices will fall as low as $-': a barrel. Domestic crude prices are currently running at atHiut $;H), but recent re-cent events in other countries suggest that price will never hold. Saudi Arabia, at a joint meeting of OPKO nations, nvently told memtiers they were dropping the base price of $:U a barrel for its crude oil and recommended recommend-ed other members do the same. Saudi Oil Minister Ahmed Zaki Yamani did not say how much the cut would be but the combined com-bined OPEC ministers have been reported to be considering a drop of as much as $7 per barrel. The remainder of the OPKC nations in the Persian Culf iignvd to follow the lead of Saudi Arabia. Yamani warned other OI'KC nations to follow suit to avoid an all out pricing war. 1-ast week Nigeria led the pricing cuts when they announced they were cutting the price of a barrel of crude by $5.50. This came on the heals of Saudi Arabia rebuking Nigeria for not charging higher prices than other OI'KC countries because Nigeria's crude is a higher grade than nearly all areas of the world. Kngland and other north Kuropean nations na-tions answered Nigeria with a price cut of their own. Since then other countries have lowered prices and thrown the oil industry into a state of uncertainty. Countries bound to lose the most from the current state of affairs are Mexico, and other countries heavily in debt. Mexico Mex-ico was recently bailed out of bankruptcy bankrupt-cy through an agreement with world hanking, based heavily on the capability capabili-ty of repayment through oil exports. Kach decrease of $l a barrel would cost Mexico SiiiKJ million a year in profits, which they are planning on to get out of their financial problems. Should oil drop below $25 a barrel it is doubtful Mexico would be able to withstand withs-tand its immense credit responsibilities. If that happens the entire world economy could be thrown into a state of chaos. On the home front things don't look quite that bad. Unemployment is high, oil exploration and drilling is down, but production is remaining constant, and the oil is still in the ground. The market ' has withstood other depressed situatioas, and most likely will withstand this one. There is good news. There were those who worried that OPEC would become a cartel and be capable of controlling the world crude oil pricing structure. Iran has been a renegade for some time and now Nigeria, among others, has also broken from the toe hold of Yamani and Saudi Arabia. There is now little talk of u ro rv WfC M WE M. ! riiiiiNG r:: NOT i NOT p I :,-Ga HI Rim i 1 "r -IMMLl 3 ' 07 I 1 Presem.j A CY nh inq . n 4; . 1 .no iirinj 1 l LjL , - - . Xje are not N T uGT ' p Wo' ye art r)U J j w Present Accepting A 1 i. I ISl'wU ! APPHcations For I LOCAL OIL companies and oil service companies have been inundated with job applicants, causing many to post signs on their front doors, telling people, they too, have no jobs. Unemployment in the Uintah Basin is running in excess of 11 percent, and with the uncertain oil market, that figure may go higher. a cartel. Now talk is about the breakup of OPEC. Without an organization to determine the world price of oil, countries coun-tries would be free to demand whatever price the market will bare. This would create fluctuations similar to the one we are now seeing, but what it would do for the overall world oil market is yet to be seen. The bad news on the same front is that Saudi Arabia has been friendly to the United States, and in the past has held prices when other members insisted on increases. If Yamani loses his place atop the OPEC nations, the next person to assume the leading role may not be as kindly dispossed toward the United States. There is no guess among local oil companies com-panies and oil service companies as to when things will get better. The plight is now resting outside the United States, but until prices again begin to rise, companies com-panies will continue to have layoffs. Right now the sign of the times seems to be "NOT HIRING". One long term Ashley Valley resident said this is the first time he can remember when companies com-panies have become so frustrated with job applicants that they are posting signs on their front doors. |