Most of you are probably tired of reading about the recent plunge in oil prices, unless it has to do with how much less you’re paying at the pump.
For the energy sector and offshore service vessel operators, it has been nothing but bad news lately. In early January, oil prices dipped below $50 bbl. with many industry pundits predicting a drop below $40. Day rates and utilization for OSVs and crewboats, especially older and smaller vessels that work the shelf, have dipped in recent months right along with the jackup rig count.
The longer oil prices remain depressed, the tougher it will be on OSV and crewboat operators. Also, some Gulf shipyards that primarily build OSVs and crewboats will suffer a bit, however the post-moratorium building frenzy was slowing down anyway.
But the workboat industry isn’t just about offshore oil and gas, though it’s certainly a big part of it. Lower fuel costs are good for the overall economy, and that’s good news for inland barge companies, passenger vessel operators and others in the workboat industry.
For inland operators, lower oil prices should lead to an increase in consumption that should translate into more demand for transportation. Lower energy prices will cut manufacturing costs and increase disposable income, which should boost spending
Increased spending and lower fuel prices are two reasons the passenger vessel industry is optimistic about 2015.
Last year was a good one for the industry and passenger vessel operators predict an even better 2015. (See our cover story on page 34.) For warm weather operators, the year has already got off on the right foot.
Both individual and corporate business is “starting off good,” said Capt. Mike Simpson, co-owner and operations manager, Island Queen Cruises, Miami. He’s hoping for a 10% increase on the individual side and 15% corporate. “Companies are maybe reaching a little deeper into their pockets,” he said. Simpson believes that lower fuel prices could be a big positive on the individual side.
Low oil prices are not bad for everyone in our industry.