The graph to the left is the drilling rig count for the US including the offshore Gulf of Mexico. Since the beginning of 2009, it has been falling like a rock. It is 50% of what it was one year ago. Why should I care, you ask? Well, those are jobs evaporating. And not just roughneck jobs on the rig but construction jobs for all the producing facilities that won't be built. And trucking jobs for the material that won't be shipped. And engineering jobs for the guys that design the production facilities. And steel mill jobs for the well casing, line pipe and plate steel that won't be made.
Why is it dropping? Besides the price of oil, think US Government and taxes. BHO has promised to completely change the tax structure for the oil industry. The uncertainty of what the final tax law is going to look like has the industry concerned. And concerned businessmen don't make investments. Sure, the tax issues of the oil industry is pretty boring stuff, but the oil industry runs on economics, and taxes are a big chunk of the calculation. Pay attention to the new tax plans. They will have more of an effect on you than you think.
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