Aug 12 2005

Oil at $67 a Barrel?

I just noticed that the price of crude oil topped $67 a barrel.  When the fuck did that happen?

In the early 1980’s, my first programming job (when I was in high school and a freshman/sophomore in college) was for a software company in Dallas called Petcom Systems.  I was the first non-founder programmer (it was started by a husband and wife team) and I wrote “Oil and Gas Economic Analysis Software” (called PCEconomics) and a Well Log Analysis Program (called PCLog).  I also worked on their Oil and Gas Accounting Product (PCAccounting) which was my first intimate exposure to the thrills of accounting software  I got paid $10 / hour plus 5% of revenue for the software I wrote, which turned out to be a suitably large number for an 18 year old in 1983 and 1984.  I watched Petcom grow from the four of us (husband, wife, me, secretary) to 20 people as they rode the early 1980’s oil boom.

In the spring and summer of 1985 the price of oil fell apart.  Petcom’s phones stopped ringing.  50% of their customers went out of business as their cost structures had expanded under the assumption that the price of oil would stay at its artificial high.  By the end of the year, Petcom was back down to about four people.  Two years later they had transitioned their products (essentially repurposing their accounting software) to be “point of sale for CD / video stores.” Ironically, Petcom’s primary competitor was another Dallas-based company – a small public company called David P. Cook & Associates that morphed into Blockbuster.

No one expected any of this (when I went to college, I was naive enough to believe people when they said “the real estate and oil economy of Dallas will keep it going forward forever”), and I had my first “boom and bust cycle” experience.

Oil price

This is going to end badly.