Today, oil was near a six-year low as the six-month-long drop in prices continued. This week, U.S. crude prices are off about 5% and have dropped over 55% since June. At around $46 bbl., oil is at its lowest price since the 2009 recession.
Many of you are probably tired of reading about 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 as day rates and utilization for OSVs and crewboats 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. But our industry, the workboat industry, isn’t just about offshore oil and gas, though it’s certainly a very 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.
For inland operators, lower oil prices should lead to an increase in consumption that should translate into more demand for transportation. A recent New York Times report said that lower energy prices, which includes diesel, fuel oil and natural gas, equate to a sizable tax cut — $1,000 or more for an average family in the U.S. over the next year.
This should boost spending, and lower energy prices will cut manufacturing costs.
Increased spending and lower fuel prices are two reasons the passenger vessel industry is optimistic about 2015.
Passenger vessel operators predict a strong year ahead. For warm weather operators, 2015 has already got off on the right foot. Both individual and corporate business has started off well for Capt. Mike Simpson, co-owner and operations manager at 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.
While pain will be felt in the offshore sector, low oil prices are not bad for everyone in our industry.