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Posted on 05/05/2025 11:22:54 AM PDT by Miami Rebel
Oil producing countries are bracing for a bumpy ride this year, with a precipitous drop in prices to the lowest levels in four years seen as the initial, alarming sign of looming turmoil.
A price drop benefits any country seeking to cut its fuel bill. But in oil producing nations, lower prices can feed economic troubles, and sometimes political unrest, as governments slash spending.
Analysts who had already been predicting lower oil prices because of softening demand amid increased global production said the possibility of a tariff trade war and the overall climate of uncertainty could well deepen producers’ woes.
“The steep price dive and overall volatility is sending a very strong signal that the global economy is going to be rattled this year and that will translate into a lower demand for oil,” said Gregory Brew, a specialist in oil and gas geopolitics with the Eurasia Group, a New York-based risk analysis organization.
Earlier this year, the price for benchmark crude held steady around $73 a barrel, high enough to sustain the budgets of most producing nations. But some countries, like Saudi Arabia and the United Arab Emirates, base ambitious development plans on a price of at least $90 a barrel, analysts say.
Saudi Arabia and the United Arab Emirates have earmarked hundreds of billions of dollars for giant projects to try to diversify their economies away from oil. Although Saudi Arabia pays for its Vision 2030 development program outside its annual budget, the huge, futuristic city project, Neom, depends on oil revenues.
In Iran, international sanctions have whittled its oil customers down. There’s China, but its demand for oil has slackened markedly amid an economic slowdown.
(Excerpt) Read more at nytimes.com ...
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Not mentioned is the reaction of the US energy industry. "Drill, baby, drill" has been a popular exhortation, but the paradox is that while weak oil prices benefit consumers, they also dampen the appetite for exploration and production.
The cost of new production has been estimated on average at anywhere between $47 to $65 per bbl. WTI. With prices below $60 currently, spending money on drilling is at best a push.
Let the market decide.
Low oil prices are a sign of a weakening economy. Less demand.
Leave it to the NYT to look for a downside to falling oil prices. Yesterday, “Oil prices rising under Trump!!!” Today, “Falling oil prices could mean trouble!!!”
I like seeing my diesel needs below $3 a gallon.
Subsidize oil and gas instead of wind and solar.
OMG!! How will we survive this catastrophe? We are doomed! (sarcasm)
I saw a statistic somewhere that said no commodity is more correlated to both the CPI, and voter satisfaction, than the price NYMEX NY RBOB gasoline nearby month price.
In that case, Trump will remain quite popular.
High oil will kill Trump’s economy! Low oil will kill Trump’s economy! We are all doomed.
Oil prices go up? TRUMP’S A NAZI SOB!!!
Oil prices go down? TRUMP’S A *HEARTLESS* NAZI SOB!!!
Trump walks on water from his yacht to shore? TRUMP CAN’T SWIM!!!
(I think I see what’s going on here...)
The oldest principle in “journalism” is “find out who is hurt, and go interview him.”
Or a lot more supply is coming.
You’re inventing a storyline.
For one thing, oil prices have done nothing but decline this year, so there’d hardly be a way to produce a headline, “Oil prices rising under Trump!!!”
For another, the trouble mentioned in this article refers to countries dependent on oil production. The US is not one of them.
Or it could represent an increase in supply.
RE: Oil Prices and Supply & Demand
Crude oil comes out of the ground.
Gasoline comes out of a pump.
What happens in between and how is supply & demand manipulated there?
If we could fast-track 2 new super-capacity refineries in the Midwest, everyone would be happy at $45/bbl crude.
Journalism logic?
Oxymoron.
Oh well, it’s their daily stretch to try and find something anti-Trump.
As for the rest of us, cheap energy is good.
And liberalism is poison.
Die, NYT, die, die, die.
The excerpted part of the article never got to exactly how the NYT thinks lower energy costs are bad, but if they think we are supposed to cry for Venezuela, they picked the wrong day to stop sniffing glue.
Lower fuel costs means lower costs of production for many sectors, as lower transportation costs. All the way around, it should help put a damper on inflation.
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