Affect of oil on our economy Essay Example | Topics and Well Written Essays - 500 words

Affect of oil on our economy - Essay Example Oil also has consequences that are unintended and have negative impact. In the previous decades, the prices of oil have always been high going for $100 per barrel. Because of increased oil consumptions in nations like China and wars in major oil countries like Iraq. The production of oil in fields that are conventional could not supply the demand efficiently hence the prices increased. The high prices made companies it Canada and USA to begin drilling, hard to get crude. Then all over sudden, the demand for oil started to reduce in places like Asia and Europe and in the USA, due to economies that were weakening and the introduced efficiency measures. Later in 2014, oil supply had risen much more that what is actually demanded. The unused oil was stored away for later use, by September, prices reduced sharply (Cochran, et al.45). The boom before the fall boosted Texas economy for nearly a half a century was finally over. The oil business in West Texas will take at least two years to recover as Houston audience was told by an economist who is familiar with Texas oil producers’ economic indicators. As the boom brought good moments in life, the downturn will lead to economic problems in Texas and other places that were beneficiaries of the boom (Henderson, Rebecca D 37). The cost of oil, permits issued and the numbers of rigs operating in Texas are in the decrease and this means the jobs of many people are in stake. Oil indexes were at the peak in October at it stood at 312.9 but it reduced in December to 309.5, and that was officially the end of a 54 month duration that the Texas energy industry expanded. It is expected that 50,000 upstream jobs will be lost in the Texas as the contraction of oil industry continues, plus additional 250,000 more jobs that are related to the oil and gas industry. GE Oil & Gas is one of the companies that has cut job, it informed the regulators that it is going to lay off 330 of