Low Oil Prices Likely To Continue Into 2016
While Louisiana's oil and gas industry continues to work its way through the current downturn in prices industry analyst aren't offering many words of encouragement.
A recent report from Moody's Investors Service is now suggesting that lower than desired oil prices will be a part of the South Louisiana economy at least until early 2016.
LSU Economist Dr. Lauren Scott says this means that local oil and gas producers as well as their support companies are going to have to continue to tighten their belts and make better business decisions to weather the downturn.
You look in those areas of the state of Louisiana that still have a good bit of oil and gas extraction activity, they’re going to, I think, continue to feel some layoffs going forward.
Many of these companies are finding it harder and harder to find financing for new projects as well and that could result in restructuring of several companies over the next few months.
Many people who remember the oil bust of the 1980's are already making comparisons between that time and the current situation but Dr. Scott told the Louisiana Radio Network that he doesn't believe this current downturn will be as bad as the 1908's downturn.
We are not in those conditions by any stretch but we do think we’ll probably still see some layoffs in the oil patch going forward.
Right now most forecasters are predicting slightly higher prices in early 2016 but most are thinking that those prices will still be below $50 per barrel.