The Price Of Oil Exposes The True State Of The Economy

TMO ^ | 11-27-2014 | Raul_I_Meijer

[blam]

November 27, 2014
By: Raul_I_Meijer

We should be glad the price of oil has fallen the way it has (losing another 6% today as I write this). Not because it makes the gas in our cars a bit cheaper, that’s nothing compared to the other service the price slump provides. That is, it allows us to see how the economy is really doing, without the multilayered veil of propaganda, spin, fixed data and bailouts and handouts for the banking system.

It shows us the huge extent to which consumer spending is falling, how much poorer people have become as stock markets set records. It also shows us how desperate producing nations have become, who have seen a third of their often principal source of revenue fall away in a few months’ time. Nigeria was first in line to devalue its currency, others will follow suit.

OPEC today decided not to cut production, but whatever decision they would have come to, nothing would have made one iota of difference. The fact that prices only started falling again after the decision was made public shows you how senseless financial markets have become, dumbed down by easy money for which no working neurons are required.

OPEC has become a theater piece, and the real world out there is getting colder. Oil producing nations can’t afford to cut their output in some vague attempt, with very uncertain outcome, to raise prices. The only way to make up for their losses is to increase production when and where they can. And some can’t even do that.

(snip)

[TheMole]

There's some truth in what this guy says, but he's overdoing it. Some other factors at play are: 1. there's a lot of oil on the market (very newsworthy in itself, indicating that fracking is real and Peak Oil isn't) 2. natural gas has replaced oil for a lot of things, like home heating oil 3. vehicles are more efficient, causing many metropolitan areas to consume less gasoline than 20 years ago despite having more cars on the road.

Oil prices are one-third lower than just a couple of months ago. There is going to be some improvement in the economy and you'll see it pretty quickly.

[mythenjoseph]

The simple fat that the writer claims that U.S. fracking is losing money at $100.00 dollars a barrel is where it proved to me what tripe and mis-information the “oracle” was putting out...round abouts 70$ or so seems to be the general break even point for what I can derive.

[mosesdapoet]

When they throw this price of gas stuff at US this never gets discussed.
It’s not the dollar ammount value that should be of concern but the purchasing power value of the dollar. When gas was well below $1.00 a gallon what was the barrel head cost ? What could we buy for a buck then, that costs 10X more today.

The question that should be asked is why ?

While much of todays barrel head quotes include the additional cost of drilling for and processing shale oil.The symptoms get discussed but not the disease .