Posted on 01/19/2016 11:12:03 AM PST by bananaman22
While low energy prices are thought to provide a boost to the global economy as consumers benefit from lower costs, there are growing signs that the dramatic collapse in oil prices – so sudden and so severe – is actually creating economic headwinds. The oil and gas industry spent $200 billion on drilling, refining, and new equipment in 2013, and the sharp cutback in spending is being felt beyond just the oil patch. Last week Wood Mackenzie estimated that $380 billion worth of oil and gas projects were scrapped by the industry.
In The New York Times on January 16, Paul Krugman explored the issue. Oil and gas companies start to have liquidity problems when oil prices crash by 70 percent in less than two years. The drop off in spending hurts broader industrial activity. Meanwhile, oil-producing countries like Saudi Arabia have to undertake painful austerity.
(Excerpt) Read more at oilprice.com ...
You don’t know what you’re talking about. But that’s okay... it’s a free forum.
Sorry, couldn't resist.
I respect your knowledge of the industry, though.
If you were President, what would you do?
Tempting to put tariffs on foreign oil... but not my first choice. Start with tearing up the Iran agreement. Stop the flow of ISIS oil through Turkey that is being sold so cheap. Convince Opec to cut back on production. See where that gets us.
Obama is trying to bankrupt Putin and the Soviet Union. If it bankrupts dirty energy producers here, it’s a win win for him. He is placing NO pressure on Opec. In fact, my opinion is he is in bed with the Saudis.
Drink your poison.
No then fracking will just restart again and this nice cycle of low gas prices will just stay in place. Nice for Krugwoman to be worried about the russians and scum in the ME though:-)
Well, we tried to tell people.
I can’t buy spit with a Pound Sterling so why should I care!
I agree this is exactly what the Dummycrats do not like to see.
Saudi isn’t going through austerity, they’re keeping the pipes open to bankrupt our own domestic operations. Anybody that’s ever pushed for domestic drilling AND is happy to see our companies going under had better be wearing a hat, cause they ain’t using the head for else.
Well, now we're down to one growth sector.
Government.
Turkey is quite the ally, aren't they? smh
You left out fleets of vehicles.
yep
I love liberal spin on oil prices. When oil was $100+ liberals were saying how great it was because it shows how great the Obamaconomy has become. Oil is low, it’s because Obama is so brilliant with his oil policy. Now... How do they spin the fact that the smoke and mirrors of the obamaconomy isn’t working anymore and commodities are crashing because the economy is in the toilet...
FUNEMPLOYMENT!!!
$20 oil starts wars.
I'm torn on this because energy supplies are a matter of national security. And perhaps it does take occasional government intervention to insure we have control over our supplies of energy, be it oil, coal, whatever. I'm just tired of being beholden to the Arabs to keep a steady supply of energy, we need to be energy independent, to not just create enough energy for us, but also to supply our allies in a crunch.
There is such a thing as too low, I guess — when hundreds of thousands of jobs depend on it. Dump the requirement for ethanol in gasoline, and the oil companies can increase their sales by 10%
Would also lower the price of corn by a hefty amount.
It works for me.
I spend less on gas and the cost of transporting goods drops, so they are cheaper as well.
That means more money for me to save and spend, if I wish.
My dollar goes further and I am more inclined to make purchases I can now afford.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.