Should you really brush off the Oil rout just because you're not invested in the sector?

Oil rout like never before?

Oil prices fell from $100 to sub $30, this I'm sure many know. After all, the Oil industry is known for its cyclical natural; rise and fall of the oil price is part and parcel of the cycle.

However, this time round, are things different?

Why the fall?
Oil prices fell due to 2 key reasons:

1. Over supply of oil
2. Slowing demand from China (the largest demand driver of oil)

China could very well turn their economy around by a stroke of luck or some incredible policy by CCP, but the over supply problem is really tricky.

I last wrote a piece on the falling oil prices here. In it, I mentioned how there seems to be no light at the end of the tunnel in bringing the oil supply back down in the near to mid future. Adding to the article, Saudi has just announced that it will not cut supply in order prop up oil prices.

I'm not invested in the Offshore & Marine industry, that's none of my business right? 
Perhaps that's true when oil fell from $100 to $50.
Yet, oil fell at the way to sub $30, and the rout lasted a tad too long.

I don't get it, cheaper oil boosts the economy right?
When oil gets ridiculously cheap, Oil majors like Shell & Chevron starts slashing projects and CAPEX. In turn, less headcount is required by the majors [read: less jobs]

Then rig builders like Keppel recently announced that they've cut close to 6000 jobs in 2015 to amidst the arduous outlook for their marine industry. [read: retrenchment].

Gearing ratio for these O&M companies starts shooting up, some even may fall into negative cash flow. Debt repayment ability starts becoming a larger and larger problem [read: banks starts having higher NPL, and touch wood, write off debts].

Countries with moderate inflation rates suddenly faces the risks of a deflation, like Singapore.

When more and more people get retrenched, either from the O&M sector or subsequently the Financial sector, the problem will start being more evident. I believe this will become a matter of "when" not "if" should the current oil rout continues and continues slowly, dragging out the pain.

Even the commonly defensive consumer segment like retail may eventually get hit if the situation plays out long enough to damage the economy.

Yet I believe somebody will eventually cry surrender and bring back the equilibrium.
As with any "crisis", things recover. Everyday when I see the market bleeding in red, I get more and more tempted to scoop up bargain chips.

At the same time, I'm wary to enter too soon, knowing that this situation could be a long and painful one. Friday's stock market showed a strong rebound in both the oil prices and share prices. But I'm still wary, because nothing fundamentally has changed: oil supply continues to be sky high, demand continues to be falling (at most stagnant).

Iran hasn't even started flooding the market with their massive oil reserves!

I'm staying patient. I'd rather miss a few cuts and still get the majority of the meat than to hop in too early and get killed by the butcher.