Posted on 10/17/2014 9:03:36 PM PDT by Abakumov
Steep stock market corrections often create shrouds of pessimism that do bad things to people’s brainpower. And one of the absolutely stupidest things I have heard in recent weeks is that the recent drop in oil prices is bad.
You heard me right. Serious people on financial television are saying lower oil prices are a signal of worldwide economic collapse. Here at home that translates to recession, deflation, a profits collapse and rising unemployment.
I’ve been around for a while, and I’ve seldom heard such gibberish.
The latest stock market scare stems from a bunch of fears — such as the possible spread of Ebola, economic slowdowns in Europe and Asia, and deflation worries. And when the stock market decides to correct, any reason will do. We must respect the wisdom of the market.
But the recent $20 drop in crude oil is an unambiguous good thing for the American and world economies. Unambiguous.
(Excerpt) Read more at humanevents.com ...
Venezuela is blaming the U.S. for low oil prices. They can blame Obama, Gore, the U.N. and all the save the earth nuts with their windmills, solar panels, electric cars,
Yeah - higher energy costs are always a good sign, while cheap and plentiful energy will crush us .....
The danger is not cheap oil, but the consequences of general commodity price collapses.
Many investors and businesses would be destroyed in a “general commodities price collapse”.
That could happen. BUT, with a good outcome in the November elections this could return confidence to the US in the world’s eyes.
A global financial collapse is possible. NO, I am not a conspiracy buff. But there are forces of evil in the US and abroad that would love to see the US destroyed.
Imagine the Global Chaos from that.
Coke head Kudlow. Ive been in the biz a long time too, over 30 years. Sure lower prices have benefits but its also a supply and demand story and demand drives prices so the lower prices are telling us something.
To really know the effect i’d lke to know a few things like what percentage of fuel oil consumption is being replaced by renewables. Another that won’t be known for awhile is how much are airlines (and other transportation industries ) are locking in for future consumption. They know how many seats they normally have booked one two or more months in advance. Its part of the equation they use to determine how much to buy in advance. What are they doing? What are they seeing?
He can spout off like most other guests without a clue on CNBC. They constantly bring back people with losing records because in the end its about entertainment and not substance. They merely add a veneer of credibility to what are often baseless speculations.
You sir win the prize. And for the posters here who think he’s shilling for Obama he’s knocked him many times in the past. He’s simply going with his natural everything is bullish inclination which is sometimes correct and often times wrong.
On the flip side, as fracking increases supply and the price of oil decreases, fracking as a means of production becomes less cost effective.
I don't know where the bottom is, but I don't think we'll see $2/gal gas again.
It's more likely they are doing it at our behest to help Obama, hurt Russia, and bury other small fry like Venezuela and even ISIS.
For Obama, any harm to fracking would be just an incidental plus.
I wonder how the whole thing plays out.
Drilling/Fraking is very sensitive to prevailing energy prices. My company makes equipment for the oil patch. Orders get cancelled when oil prices drop $5. It seems ridiculous, but the oil business is very aware of alternative energy sources.
No, the collapse world in oil price is the sign of Texas Eagle Ford producing 1.2 million barrels a day of “light sweet” crude.
” Do we really like being depend on SaudiArabia?”
Absolutely not. I contend oil spiking to $150 a barrel is what sent the whole house of cards tumbling before the financial crisis.
Incumbents benefit from cheaper fuel prices. In the two months before the 2012 general election, fuel prices dropped 9% (37 cents) with OHIO (key battleground state between Romney/Obama) dropping 55 cents. Low fuel prices boost consumer confidence. Obama was re-elected. We all know (or should) that it is the Wall Street speculators who control the price of oil (not demand) but we also know that Wall Street gives more to Dems than Repubs. Quoting Jim Demint of the Heritage Foundation “...it amazed me while I was in Congress to see the big Wall Street banks, the big corporations — they give more to Democrats, many times more, than they do to Republicans because the big government, and the more it grows, the more it advantages them.”
These low prices are a temporary gift to the incumbent Dems for Wall Street’s future advantage. Wink wink. Bought and paid for. Simple.
Just part of my background, in a way. Made sense at the time.
and its a bust for the oil producers...
I could care less if the big elites get a little less profit....
I agree with whoever said this could just be a Middle east scheme to slow the production and exploration of oil/gas here in North America.....
which all means in the end is that we're just little puppets on a string in this world, swaying whichever way the elites want us to go...
I think it’s a sign of an election. The price will go back up afterwards.
By order of the Prophets......
Rest assured, there is no way your scenario will play out.
To begin with, the western oil would still be there. If Saudi Arabia, or OPEC, or any other oil producer raised the economic or political price domestic suppliers would step back in.
The OPEC nations can’t just turn off the tap — nor can they flood the market with oil. They’re way too dependent on oil revenues to do either. They also pump more oil, when there’s a supply glut — that just drives prices even lower. They can’t cut production during low prices, because they need the revenue (or face revolutions).
New investment in oil sands or shale will no doubt fall off, as prices drop. However, once a well (or open-pit mine) is developed (sunk cost — literally), it faces a lower marginal operational cost. Prices would have to drop to under $35.00/bbl before most oil sands production would be uneconomic.
BTW, for years now, Canada (already your biggest supplier) has been ready to sell the U.S. a lot more oil — more than you now import from Saudi Arabia, Iraq, and Kuwait combined. All that’s required is U.S. approval for the pipeline.
Low Oil Prices: A $660 Billion Stimulus Package
http://www.freerepublic.com/focus/f-news/3216278/posts
i don’t agree lower oil is an unambiguous good. No doubt it has benefits but it’s also signaling underlying weakness in world economies. It might be seen as feeling really good but having a serious illness at the same time.
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