Cheap Oil Could Hurt The Philippines Economy

[Onemore52]

I was reading an article in a magazine last night which made a lot of sense:

 

That there are 10 million people from the Philippines working overseas in Oil related industries and that they sent home $22.8billion in the first 11 months of 2015, around 10 percent of the the gross domestic product.

 

A prolonged period of oil at less than $30 a barrel could create an economic headache for the successor to President Benigno Aquino and may further weaken the peso.

 

Relevant to all this is what the price of oil is doing to employment in other countries, with a lot of rigs going idle and even more being scrapped.

 

So while we are enjoying cheap petrol at the pump, the effects of the cheap oil is not good for everyone, especially those whose livelihood depends on the industry.

 

 

Just a thought.

 

 

[robert k]

Tell me about it! My income is linked to oil and right now my expenditures would be more than my income, but that is what savings are for. The rainy day has arrived.

 

Many retired persons have a greater or lesser amount their retirement portfolio linked to oil directly or indirectly. For the Philippines, the loss of oil workers income is not good but probably still a fairly small part of that 10% of GDP. I am also sure there is a pay differential between what they pay for a western oil worker and a Filipino one and all things being equal, they will let the most expensive workers go first as bean counters are not interested in much else. Oil companies are the ultimate bean counters in some areas while in other areas their waste of money would shame drunken sailors. Apologies to drunken sailors. :tiphat:

 

Oil is complex business. Even though there is a glut of oil in the US the big corporations have INCREASED the amount of oil they import. God only knows what they are paying for the imported oil, how far below the reported market value. They do this because even they are feeling the pinch and to make $1 more or save that amount per barrel in transport cost by importing, that is what they are going to do. The Koch brothers recently bought some sour crude in the US for -$0.50. That is right. Someone paid them a half dollar per barrel to take it off their hands so they didn't have to store it. Sour crude usually sells at $8-$10 discount to sweet because it needs a little more refining, but not much more. Sorry for going so far astray but I thought some might find it of interest. :unsure:

[earthdome]

I was reading an article in a magazine last night which made a lot of sense:

 

That there are 10 million people from the Philippines working overseas in Oil related industries and that they sent home $22.8billion in the first 11 months of 2015, around 10 percent of the the gross domestic product.

 

A prolonged period of oil at less than $30 a barrel could create an economic headache for the successor to President Benigno Aquino and may further weaken the peso.

 

Relevant to all this is what the price of oil is doing to employment in other countries, with a lot of rigs going idle and even more being scrapped.

 

So while we are enjoying cheap petrol at the pump, the effects of the cheap oil is not good for everyone, especially those whose livelihood depends on the industry.

 

 

Just a thought.

 

How many OFW filipino's work directly in the oil industry or supporting industries? I expect it is only a small percentage of all OFW's. All of the extra economic activity from the cost of fuel dropping in half should easily offset that.

[Onemore52]

Tell me about it! My income is linked to oil and right now my expenditures would be more than my income, but that is what savings are for. The rainy day has arrived.

 

Many retired persons have a greater or lesser amount their retirement portfolio linked to oil directly or indirectly. For the Philippines, the loss of oil workers income is not good but probably still a fairly small part of that 10% of GDP. I am also sure there is a pay differential between what they pay for a western oil worker and a Filipino one and all things being equal, they will let the most expensive workers go first as bean counters are not interested in much else. Oil companies are the ultimate bean counters in some areas while in other areas their waste of money would shame drunken sailors. Apologies to drunken sailors. :tiphat:

 

Oil is complex business. Even though there is a glut of oil in the US the big corporations have INCREASED the amount of oil they import. God only knows what they are paying for the imported oil, how far below the reported market value. They do this because even they are feeling the pinch and to make $1 more or save that amount per barrel in transport cost by importing, that is what they are going to do. The Koch brothers recently bought some sour crude in the US for -$0.50. That is right. Someone paid them a half dollar per barrel to take it off their hands so they didn't have to store it. Sour crude usually sells at $8-$10 discount to sweet because it needs a little more refining, but not much more. Sorry for going so far astray but I thought some might find it of interest. :unsure:

 

Yes, my rainy day is here as well, but luckily I was due to retire in a couple of years, so it just came earlier.

 

My thought is that because of the oversupply of rigs it will take a long time to recover, if it recovers at all.

 

Some of the drilling companies are scrapping drillships that are only 10 years old.

 

The point you made about the Koch brothers makes sense because they have nowhere to store the stuff.

 

Interesting times!

 

Cheers

[scott h]

How many OFW filipino's work directly in the oil industry or supporting industries?

 

I read the same article. I am no economist but I think this is layered like an onion, maybe Filipinos don't work directly in oil, but the supporting is probably massive. Food service in barracks, truck drivers, nurses, janitors. Any job that skilled oil workers either don't want to do or are over skilled for.

 

I know during the Iraq war, US bases had almost as many Filipinos working in support roles as US Soldiers lolol.

 

On the bright side, this might be good for retiree expats (unless their pensions are tied to oil). If OFW remittances decrease perhaps there will be a period of deflation. Or if the Filipino family an expat is tied to relies upon an OFW or two the financial demands upon the expat might be higher.

[mogo51]

An interesting topic and thank yo all for contributing.

Just one question, if they mix the sweet crude, with the sour crude, do they get sweet and sour crude???

[robert k]

An interesting topic and thank yo all for contributing.

Just one question, if they mix the sweet crude, with the sour crude, do they get sweet and sour crude???

Actually they just heat it in a pressure cooker because the cake wasn't quite done yet and remove some sulfer.

 

Then too, it all stinks whether it is sweet or sour and sweet means it has acceptably low amounts of H2S gas and sulfer. They do blend oils.

 

The Canadian tar sands extracts are mixed with highly volatile condensates (naturally occurring gasoline) to turn them into an acceptable form of crude oil suitable for transport by pipeline. Having to add gasoline/petrol that could already be sold as gasoline is a large part of the reason the Tar Sands need $70+USD per barrel to show a profit.

[Jack Peterson]

:hystery:  We will know when we got a Problem Folks when this happens.

   :mocking:

 

 

 

Sorry, I got carried away but.................... :rolleyes:

 

Jack :)

 

 

[Kuya John]

Just one question, if they mix the sweet crude, with the sour crude, do they get sweet and sour crude???

After Jacks contribution....NO

They get sweet and sour chicken!

BP have just announced a possible loss of 3000 more jobs on the down turn.

Although other industries and commodities will benefit from cheaper fuel.