Oil Prices: What’s Behind the Plunge? SIMPLE ECONOMICS AND NEW TECHNOLOGY

Earnings are down for companies that have made record profits in recent years, forcing them to decommission more than half their rigs and sharply cut investments in exploration and production. More than 100,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply.​

As oil prices have continued their steady decline this year, rig after rig has been shut down, costing thousands of jobs in the United States. Yet major oil producers have been loath to pull the plug on their most ambitious projects — the multibillion-dollar investments that form the backbone of their operations.

Until now. On Monday, Royal Dutch Shell ended its expensive and fruitless nine-year effort to explore for oil in the Alaskan Arctic — a $7 billion investment — in another sign that the entire industry is trimming its ambitions in the wake of collapsing oil prices.