Hitting oil when it's down

Oil investors have had it rough lately.

While drivers may be celebrating the drop in prices, for oil companies, the sharp fall has waylaid their employees and investors. Oil is down 50 percent over the past six months and has fallen 70 percent in the last year and a half.

BP's quarterly profits were cut in half. Earnings at Shell fell by 44 percent. Exxon and Chevron are slashing the amount they're spending on oil projects. Smaller firms have been cutting jobs, just hoping to survive. The unemployment rate in Texas jumped half a percent during the second half of 2015.

Oil's slide has also been getting some blame for the steep drops recently seen in the stock market. There's an obsession over what the oil decline portends for the economy. The lockstep movement, up or down, between stocks and oil signifies what, exactly? A global glut of oil? Weakening demand from emerging markets? Yes to both. Impending shifts to clean energy? Not likely anytime soon.

In the week ahead, President Barack Obama is expected to propose a new tax on oil to raise money for new transportation ideas. The president's final budget request will include a 10-year, $300-billion investment in alternatives to jamming more cars and SUVs on America's already choked roadways. The money would go toward mass transit, self-driving cars and high-speed rail, among other projects.

The money would come from a $10 per barrel tax on oil. There's no chance this idea gets through the Republican-controlled Congress. The president's timing will fuel the political debate over energy but do little for market economics.

Tom Hudson, financial journalist, hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. Follow him on Twitter @HudsonsView.

This story was originally published February 5, 2016 at 11:58 PM with the headline "Hitting oil when it's down ."