The Economist has a helpful brief outline — here — of why oil prices are so low.  I continue to think that oil prices will stabilize in the $55-$65 range, but now that it’s apparent that most Bakken oil is profitable around $42, I would not be surprised to see prices bounce around in that range periodically for a while, too. 

A few things to keep in perspective when you hear about how the energy sector is suffering: 

(1) It’s not very often through the years that anyone would be upset by low energy prices.  That usually is a sign of good things to come in terms of markets because low energy prices can reduce costs of manufacturing, they tend to increase demand (in energy and beyond), and it tends to mean more money in consumers’ pockets. Those are usually very good things. 

(2) Despite layoffs are some energy sector companies, and a dramatic slow down of drilling, if you looked back to 2005 0r 2006 (an even more recently) people would have been thrilled to see the sector with this many jobs. Even another 20-30% slow down represents a strong and viable industry.

(3) Legal work for the sector is likely to carry on at a strong pace. A slow down will mean a slower pace in many sectors, and mineral leasing and other title work will likely slow significantly, but slow downs can lead to increases in M&A, restructuring, and litigation. 

There are concerns, but it’s always helpful to keep things in perspective. It’s fair to raise questions and highlight the rapid changes, but it’s not all gloom and doom.