OPEC's Pyrrhic Victory -- December 2, 2015

To be read later. From John Kemp/Rigzone: OPEC Risks Pyrrhic Victory With Oil Policy.

"If we are victorious in one more battle with the Romans, we shall be utterly ruined," King Pyrrhus of Epirus complained after winning exceptionally bloody engagements in 280 and 279 BC.

Pyrrhus lost many of his men, most of his generals and had no reserves left, while "the army of the Romans, as if from a fountain gushing forth indoors, was easily and speedily filled up again" according to Plutarch.

The king of Epirus, reported to have been a brilliant general, has come to symbolise victories that are so expensive they leave the victor dangerously weakened.

Pyrrhus won the battle but lost the war.

As ministers from the Organization of the Petroleum Exporting Countries meet in Vienna, some may wonder if the strategy of maintaining output to defend market share risks securing a Pyrrhic victory.

OPEC has put shale producers on the defensive and forced the cancellation of many ambitious oil projects with its strategy of going for volume over price.

But members are gradually running out of money and the shale industry is waiting for any upturn in prices to start ramping up production again.

From SayAnythingBlog: Oil Slow Down May Not Be Hurting North Dakota Employment As Much As You Think.

The future is always uncertain, but it seems that labor markets in the core Bakken counties could be having their Mark Twain moment: “The report of my death was an exaggeration.”

My central argument here is not that the markets are not correcting, and I am not suggesting declines in employment will not happen, though the extent of that decide is obviously debatable. At some level, you might expect people to welcome the pause in the employment growth occurring now. It could reduce pressures in the other related areas such as housing.

Regardless of any decline, the data show that employment is still more than twice the level from just 5 years ago.

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A Note to the Granddaughters

I suppose this is true across the US. I don't know. But here in Texas, "they" really love their sports. By middle school everyone must go out for a sport. If one is not 6'7" (no basketball) or 350 lbs (no football), the most common option is long distance track or long distance running. It really is quite amazing.

Our oldest granddaughter, 7th grade, is part of her middle school's long distance track team, which appears to be every middle school student who is not playing football or basketball. Today was another track meet. I did not plan on going but I did look forward to picking her up at the scheduled time of 6:00 p.m. I went early just in case she finished early because later she would have two hours of water polo practice (which does not count as one of the district sports). I got there at 5:00 p.m. and was overwhelmed by the number of students there, It appears there were three or four schools represented.

In her long distance heat, 400 girls were entered into the long distance "race." Four hundred girls. Wow. She came in 20th. When I saw her ribbon for coming in 20th, I was not particularly impressed until I learned there were 400 girls competing. Wow. The neatest thing were the number of parents there and they were not simply sitting in the grandstands. They were actively walking among the students, urging them on and congratulating them as they came across the finish line.

Our granddaughter's event was over; she was getting her "stuff" so I could take her home. But all that was interrupted when the stood at the top of the grandstand, swung her right arm, and yelled to her male colleagues, encouraging them to run faster. She was really into this, and judging by the smiles on everyone's faces, they were all having a great time.