The downside of cheap gasoline
Crain’s Cleveland Business reports that U.S. Steel is temporarily laying off 614 workers, beginning the first week in March, due to a “softening in the energy market.”
With the price of oil in a free fall, the demand for the tubular steel needed to drill shale wells has fallen almost as quickly. Ironically, Ohio’s Utica shale and the Marcellus shale in nearby western Pennsylvania are primarily natural gas and natural gas liquids producers. While the price of natural gas has been low for sometime now, it is still profitable to produce.
The markets that U.S. Steel has lost are the heavy oil producing shale plays in Texas and North Dakota. While these areas will continue to produce large volumes of oil – the U.S. is now the largest producer in the world – no one will be drilling many wells any time soon.
Click here to read Crain's full article.