Are low crude oil and gasoline prices good or bad? (Congress, Reagan)
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Crude Oil prices are down below $30 per barrel, with some people predicting they will fall below $20 per barrel. Meanwhile, the stock market has had its worst annual start in recorded history. Things are not looking good here, fellas.
So Barack Obama's bad deal with Iran has helped grease the skids for this decline. Well done again, Barack.
There needs to be some balance in these prices. Nobody likes them too high, but now they are getting too low.
LMAO...too low for whom exactly?
Excuse me, but when the oil companies were carrying money out the doors in dump trucks, they never came by my house and left any.
The free market is working on behalf of consumers for once, and now you declare that it's broken!
Excuse me, but when the oil companies were carrying money out the doors in dump trucks, they never came by my house and left any.
The free market is working on behalf of consumers for once, and now you declare that it's broken!
Ummmm...no.
It's suspected than half of all oilfield service companies will go bankrupt in 2016. Many of these are small businesses that aren't huge corporations who made hand over fist when the price was high. Large corporations like Schlumberger, Halliburton, and Exxon Mobil will survive but many won't. Oil is also one of the last real blue collar opportunities available in the US. This is putting a lot of families that were finally recovering from the 2009 crash back into a bad spot. My husband works in oil and we didn't get dump trucks of money on our door either. That's not how it works (unless you live in Alaska). We will survive, we saved as we aren't new to the industry and prepared for when it would crash (because it will).
Either way, the price of oil will eventually go back up. Everyone should want a stable oil price, stable prices mean a more stable economy as a whole. Look at the market, when oil falls it's not long til everything else seems to crash. I don't want to see $100/bbl prices, but in order for the market to remain steady and profitable (which it is NOT right now) it needs to be closer to $60/bbl.
It's mostly positive. Low oil prices free up consumer spending for other things and also helps the auto industry. Some sectors will be hurt. Namely the oil industry( which has made enough already) and alternative energy sources( who have lived off the public dole anyway and never turned a profit ) Saving a few dollars every time you go to the pump or being able to keep the house warmer can't be bad. Cheaper food prices is a plus also.
The Canadian dollar is on its longest losing streak since at least the 1970s as speculation mounts that the central bank will cut interest rates back to the record low only seen amid the 2009 financial crisis, with almost nothing left to drive the country’s economy.
Neither the Candadian central bank, nor the Europeans, nor the Japanese, nor ours have any ammunition left to throw at this. We have used our central banks to prop up an inflation target regime (usually about 2%) for decades. Slowly but surely we forced the balloon of our economy to inflate, inflate, inflate, slowly but surely, over the last thirty years so slowly that nobody cared very much.
This was important to our government because this is how we have effectively funded and paid for our budget deficits. By the time that 30 year bonds come due, the money owed was worth far less than what was borrowed. The steady inflation functions like a ~2% tax on our entire economy, every year. Good for borrowers, bad for lenders.
The Japanese section of the bubble burst first in an earnest, unreinflatable manner about 20 years ago now. They have been in a deflationary mode from then until now. Since 2008, the world economy has been trying to deflate so hard you could almost see it. To compensate, central banks have been working overtime to try to reinflate the bubbles, which they have recently overdone with the stock and real estate markets, but the rest of the economy has been barely breaking even in terms of annual inflation. Now it is not even working on the real estate or stock markets. The last tool in the bag, the "Quantitative Easing" or money printing in the common vernacular, appears to have run out of juice.
The solution is one that you will be hard pressed to find anyone discussing anywhere that I have seen. Just let the balloon deflate and self-correct. The pain and financial suffering would be immense, not least of all for national governments around the world, including our own. They are flailing around trying to stop it from happening, as the natural pressure is strongly pressing in that direction, but they do not appear to have any tools or ammunition left to fight it with. Nevertheless, it appears that the path of least resistance, which may be inevitable anyway, is truly unimaginable to them.
Um, the Free Market sets the price of oil as it should be and you liken that to price-fixing?
OPEC is an oil cartel. The purpose of this group is to manipulate world oil prices according to the desires of its members. Currently the Saudi's are calling the shots pretty much on their own, much to the dismay of the rest of their partners in the cartel.
If you want to see reasonable market prices, the Saudi's need to cut production to a sensible economic level. This would provide them with more income for less oil, while at the same time preserving their crude oil reserves for a longer period of time. Instead, they have decided to intentionally flood the market with super-cheap oil in an effort to try to undermine the US fracking industry, which was in the process of effectively destroying the power of the OPEC cartel to determine oil prices when the Saudis decided to start a price war.
You want market prices according to rational micro-economic theory and practice? You need to get with the Saudis, as they are the ones that are currently impeding that. Just FYI, I would like to see that myself.
It's suspected than half of all oilfield service companies will go bankrupt in 2016. Many of these are small businesses that aren't huge corporations who made hand over fist when the price was high. Large corporations like Schlumberger, Halliburton, and Exxon Mobil will survive but many won't. Oil is also one of the last real blue collar opportunities available in the US. This is putting a lot of families that were finally recovering from the 2009 crash back into a bad spot. My husband works in oil and we didn't get dump trucks of money on our door either. That's not how it works (unless you live in Alaska). We will survive, we saved as we aren't new to the industry and prepared for when it would crash (because it will).
Either way, the price of oil will eventually go back up. Everyone should want a stable oil price, stable prices mean a more stable economy as a whole. Look at the market, when oil falls it's not long til everything else seems to crash. I don't want to see $100/bbl prices, but in order for the market to remain steady and profitable (which it is NOT right now) it needs to be closer to $60/bbl.
I hear ya and I respect your concerns, but....
When GM and Chrysler looked like they might fail in 2008, the same people with so much concern about the oil industry said "let the auto manufacturers fail." I remember it like it was yesterday. In fact, they WANTED it to fail so that the UAW could be busted. There was no concern about the workers, who were accused of being overpaid.
But now, we're all supposed to be bleeding hearts for oilfield workers.
I hate to see anyone lose their jobs, but something tells me that 90% of those guys are right leaning so SURELY they believe in the free market and wouldn't dream of the government stepping in to grant a floor price on a barrel of oil. That would be socialism and government meddling....something they normally hate.
The pain doesn't have to be that great except for those who want to make a living swapping paper and I say fook them.
Japan is and has been doing O.K. with light deflation. Whenever I mention this the detractors go off the deep end.
That may well be right. But once again, it is the 1%'ers who are calling the shots on this stuff and the US Government would also be one of the leading sufferers as well. They do not want this to happen.
It would also be bad for borrowers, including homeowners with mortgages. If this went on for a protracted period of time, these borrowers will pay back more in deflation adjusted terms than they borrowed, perhaps by quite a bit.
That may well be right. But once again, it is the 1%'ers who are calling the shots on this stuff and the US Government would also be one of the leading sufferers as well. They do not want this to happen.
It would also be bad for borrowers, including homeowners with mortgages. If this went on for a protracted period of time, these borrowers will pay back more in deflation adjusted terms than they borrowed, perhaps by quite a bit.
If one was wise and refinanced your mortgage to the recent low rates it won't be too bad......
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