If It Owns a Well or a Mine, It's Probably in Trouble - The New York Times - 0 views
www.nytimes.com/...jobs-amid-commodity-slump.html
mine trouble new york times crisis gas oil mining fracking china us jobs
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The pain among energy and mining producers worsened again on Tuesday, as one of the industry’s largest players cut its work force by nearly two-thirds and Chinese trade data amplified concerns about the country’s appetite for commodities.
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The full extent of the shakeout will depend on whether commodities prices have further to fall. And the outlook is shaky, with a swirl of forces battering the markets.
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The world’s biggest buyer of commodities, China, has pulled back sharply during its economic slowdown. But the world is dealing with gluts in oil, gas, copper and even some grains.
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The pressure on prices has been significant. Continue reading the main story Related Coverage China’s Slowdown Tarnishes Economic Boom in Copper-Rich ZambiaDEC. 2, 2015 A Global Chill in Commodity Demand Hits America’s HeartlandOCT. 23, 2015 Glencore Isn’t Out of the Woods YetOCT. 1, 2015 Prices for iron ore, the crucial steelmaking ingredient, have fallen by about 40 percent this year. The Brent crude oil benchmark is now hovering around $40 a barrel, down from more than a $110 since the summer of 2014.
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Companies are caught in the downdraft.A number of commodity-related businesses have either declared bankruptcy or fallen behind in their debt payments
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Even more common are the cutbacks. Nearly 1,200 oil rigs, or two-thirds of the American total, have been decommissioned since late last year. More than 250,000 workers in the oil and gas industry worldwide have been laid off, with more than a third coming in the United States.
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The international mining company Anglo American is pulling back broadly, with a goal to reduce the company’s size by 60 percent. Along with the layoffs announced on Tuesday, the company is suspending its dividend, halving its business units, as well as unloading mines and smelters.
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China looms large in the commodities equation.Between 2000 and last year, companies invested hundreds of billions of dollars to expand their production capacity to satisfy China in a period of rapid economic expansion. Much of the corporate growth was fueled by debt.