Posted on 04/12/2016 8:01:35 AM PDT by bananaman22
Many analysts had anticipated that a dramatic drop in oil prices such as we’ve seen since the summer of 2014 could provide a big stimulus to the economy of a net oil importer like the United States. That doesn’t seem to be what we’ve observed in the data.
There is no question that lower oil prices have been a big windfall for consumers. Americans today are spending $180 B less each year on energy goods and services than we were in July of 2014, which corresponds to about 1 percent of GDP. A year and a half ago, energy expenses constituted 5.4 percent of total consumer spending. Today that share is down to 3.7 percent.
(Excerpt) Read more at oilprice.com ...
They’ve helped MY economy!
Just made it easier to ship everything off-shore while other prices continue to rise.
$2.50/gal for gasoline is still a ripoff.
Oil sees to be steadily marching back to $45 per barrel from the low of about $31 per barrel. So pump prices are heading back up. Fundamentals really haven’t changed, but somebody has made the determination of where prices need to be.
Because the regulatory agencies have outlawed everything entrepreneurial.
That somebody is a guy called the free market.
I predict the price target for oil is around $50 per barrel. Might swing a bit lower and then there will be times it spike well past that. It’s all manipulated, and now that the frackers are all but out the ability to manipulate the oil market is re-strengthened back to where the money managers like.
It took pump prices a year to adjust to the lows, oil goes up and they jack the prices up in seconds.
In Feb I saw pump prices as low as $1.45, end of March $1.89 for a whopping $12 increase in oil
what a scam
That is naïve. The “free market” in this case is heavily manipulated.
> A year and a half ago, energy expenses constituted 5.4 percent of total consumer spending. Today that share is down to 3.7 percent.
That’s a good thing for the average person. The success of the economy shouldn’t be measured by how fast you can mindlessly shuffle money around (GDP). Cheaper oil gives people the option to save or live a little better on the same income.
I think u got that backwards. The Saudis manipulated the oil market, the frackers cut into Saudi exports. We actually were energy independent for a while there but at these low prices frackers lose money drilling so they shut down.
HAHAHAHA
As far as the total economy goes, doesn’t any money not spent on gasoline get spent somewhere else. Most live paycheck to paycheck, so if it isn’t going in the tank, it is going to clothes or a house or a hairdo. If money is saved then that hurts the economy doesn’t it in the short run?
Bullfeathers!
Those that get royalties get more money and they spend it ... those that don't get less expensive gasoline and that leaves more of their earned money to spend
The bottom line about the economy is whether people have money to spend and whether they will
Low oil prices allow both.
In 1966, gasoline cost $0.32 a gallon, and gold was $35 an ounce. This morning in AZ, gasoline costs $2.19 a gallon, or just under 7 times more, while gold is $1268 an ounce, or just over 36 times more. In terms of what the dollar is worth, we should be paying about $13/gal--I'm not advocating this by any means, just pointing out how much more it cost 50 years ago to buy gas than it does today.
P.S. I lived in Japan in the late 60s: on base, the gas price was $0.15, while the Japanese paid, IIRC, the exorbitant price of about $0.50/gal.
I think this is the correct interpretation. Those who see gasoline expenses as a larger percentage of their monthly income (Uber drivers?) have spent that windfall on higher consumption of other things. People who don't use much gasoline have not directly benefited. The bigger drag has been piss-poor federal spending/taxation policy goals which has put everyone who earns an income on the defensive. If you're on welfare, you've seen a 31% increase in your payments since Dufus came into office, so you're on a spending roll. If you're on SS like me, the increase is 0.2%, so you tend to hold spending in check 'cuz you don't know what the Chief Idiot is going to do. It's likely worse for business planning under such conditions of uncertainty.
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