Cause & Effect

By: Matt Rosenberg / December 29, 2015

With the overall oil market news of oversupply and lessening demand remaining consistent over the past few months various U.S. state economies and international economies have suffered in different ways.

  • Kern County in California has seen $8 billion disappear from its property-tax base causing cuts in all county departments with further cuts anticipated.
  • In Alaska, Louisiana and Oklahoma the market drop which has led to less tax revenue is causing investors to want higher yields on their investments.
  • In the largest oil producing state of Texas the energy slowdown has led to a 3% decrease in sales tax revenue for November 2015 vs. November 2014.
  • Colorado is estimating a 2015 budget shortfall of $208 million.
  • North Dakota tax collections are behind 9% for the state 2015-2017 budget.

As one analyst commented “the longer it goes the more significant it gets.”       

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  • Saudi Arabia has reduced energy subsidies with defense and security now budgeted to be the biggest item of their government spending.
  • The Saudi Arabian government will increase the prices of fuel, electricity and water as they plan to restructure subsidies within five years.
  • Revenue in Saudi Arabia is forecast to drop approximately 17% in 2016.

A London based analyst stated “Saudi society will have to get used to a new way of working with the government.  This is a wake-up call for both Saudi society and the government that things are changing.” 

As of mid-day today Heating Oil and RBOB are both up .03 - .04 cents while crude is up .01.

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Categories: Daily Market Update


Matt Rosenberg

Written by

Matt Rosenberg

As a key accounts manager, Matt helps large customers make mission-critical decisions by providing timely advice regarding market conditions.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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