Report: 'Oil price drop makes for some losers as well as winners'

Lower oil prices are making drives happy at the pump, but McClatchy Newspapers reports that good news for some is troubling for others, including the State of Louisiana.

Lower oil prices mean declining revenue for oil companies and oil revenue-dependent governments, and they’ve suffered as oil prices have dropped by 75 percent since July.

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The oil-price drop continued Friday, with prices falling below $36 a barrel — their lowest in more than four years — from their high of $147 in July. Prices fell even as the Organization of Petroleum Exporting Countries pledged this week to cut oil production by a record 2.46 million barrels a day to stop the decline.

“Realistically, we won’t get back to the $80-a-barrel range until 2010,” Johnston said. “With unemployment rising, people are making fewer trips to work, and demand is down.”

Overall, the United States — the world’s biggest net oil importer — comes out ahead with the fall in oil prices. The drop comes at an opportune time for millions of households in areas that rack up high heating bills.

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“Governments are going to be severely tested in trying to address all these factors,” Sherr said. “There’s going to be a lot of pressure on commodity-exporting countries and on their currencies and reserves.”

U.S. states that depend on oil revenue, such as Louisiana and Texas, also are suffering, as are drilling, trucking and oil exploration firms, which had seen business boom when prices were high.

Foreign and domestic oil companies are abandoning exploration projects that had been profitable at $140 a barrel but aren’t worth continuing at $35 a barrel.

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