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Rapid fall in oil prices may portend global recession
NY Post ^ | December 14, 2014 | Jonathon M. Trugman

Posted on 12/16/2014 4:56:58 AM PST by thackney

Cratering crude-oil prices may be a blessing to cash-strapped American consumers, but it’s a double-edged sword when it comes to the overall economy.

The problem for the overall economy is not so much the drop in oil prices as it is the velocity at which oil prices have fallen.

The plunge from a peak of just over $100 per barrel in the early summer to today’s $58 — a massive 42 percent drop in just a few short months, most of which has come in the last 90 days — could make anyone’s head spin.

The rapid fall in crude prices is a telling sign to some Wall Street analysts and economists that there may be a global recession taking hold and the slowing growth is pushing oil lower.

Remember, at the height of the financial crisis, crude got down into the high $30s a barrel at the end of 2008 as the US and Europe went into a recession.

But some on Wall Street see pricing forces that go beyond the supply-and-demand model to take in geo-political intrigue.

There will be plenty of Commodity Pool Operators (CPOs) and some hedge-fund managers holding high-yield energy bonds that are taking it on the chin.

And, yes, several of the big banks came out this week saying that while business in general was good, trading revenue will be down from last quarter.

(Excerpt) Read more at nypost.com ...


TOPICS: News/Current Events
KEYWORDS: commodities; commodity; energy; gasprices; globalism; oil
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To: goldstategop
I hope the price of oil drops a lot further.

I'm not as confident as you are of a positive outcome. In the US, will we be replacing high paying jobs in the energy sector with jobs for people to sell cheap junk from China? What about emerging nations which are building their fledgling economies? Will lower oil prices ruin their economies? Who will buy up the energy related companies when they go bust? Will the US consumer again end up in even deeper debt, buying vehicles and houses they can afford, but only because of lower fuel costs? What happens to the booming economies in oil-producing states? Will destabilized countries cause even more terrorism issues?

This is unchartered territory.

21 posted on 12/16/2014 5:29:36 AM PST by grania
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To: thackney; goldstategop
If your job was selling or building pumps, pipes or any of the other many items or services purchased by the US oil industry

That list could go on and on and on.

Oil and the great fracking boom have been the wellspring of the U.S. commerce for nearly a decade now.

Without the oil renaissance the economy would have remained as flat and lifeless as it was when Obama took office (which just so happens to be exactly what he would have preferred).

A strong energy industry means a strong U.S....always has.

22 posted on 12/16/2014 5:30:21 AM PST by Fightin Whitey
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To: goldstategop
Oil IS cheaper no thanks to them.

Correct, they have not raise the oil supply to the market, we have.

23 posted on 12/16/2014 5:31:20 AM PST by thackney (life is fragile, handle with prayer.)
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To: grania

Let’s point out most countries are not dependent on oil revenue to balance their budgets and they’re not going to see much of a difference from tumbling oil prices.

Anti-American regimes like Iran, Venezuela and Russia are facing financial catastrophe. That will weaken their ability to create trouble for us for many years.

With cheaper prices and the benefits that come from deflation, life will be a lot easier for most people for awhile.


24 posted on 12/16/2014 5:34:53 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: grania
“This is unchartered territory.”

Agreed, and when you are in uncharted territory you need the creativity and innovation that allows you to take advantage of uncertainty and to set the course and direction for everyone else in the world. We used to be able to do this.

25 posted on 12/16/2014 5:40:56 AM PST by pieceofthepuzzle
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To: thackney

Crashing Oil Prices Will Be Terrible ONLY For A Tiny Part Of The US Economy

http://www.businessinsider.com/energy-investment-a-small-share-of-gdp-2014-12

The long economic history of America has been one of displacements with loss of jobs in an area/or the nation and outdated and no longer needed skill sets. We call these eras, recessions.

Later, there is a positive economic shift up with increased jobs (with the exception of the Obama era) often in different geo areas and different needed skill sets. These eras are called economic booms or growth eras.

We get into trouble in geo areas and as a nation, when we try to $crew around with this reality. The ups and downs and dislocations and the following economic booms, which have made us the long lasting economic power we have been.


26 posted on 12/16/2014 5:44:21 AM PST by Grampa Dave (The Democrats, who run America are too old, too rich, and too very/very white elitist losers!.)
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To: bray

Yeah, if anything, this portends a [temporary] boom in our economy at the very least,
energy using economies in general,
and the world economy to a lesser extent.


27 posted on 12/16/2014 5:45:27 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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Comment #28 Removed by Moderator

To: thackney

The sky is falling! Everyone Panic!


29 posted on 12/16/2014 5:53:05 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: thackney

This really demonstrates how out of touch Obama is. Were Bill Clinton POTUS, he would be claiming credit for dropping oil prices at every opportunity.

Ironically, the reason Obama isn’t is because he is so ideologically rigid that he is miserable that oil prices are falling. Like many in his party, he wants gasoline prices at European levels, like $5-7 a gallon, because “gasoline is bad”, along with all other fossil fuels.

Remember that these Democrats were determined to “destroy coal”, to the point that this winter, New England is going to freeze its pasty-white rear end off, because they closed their energy producers hoping they could power it all with windmills. Idiots.

The bottom line is that this may initially cause some deflation, because of lower fuel prices. But then production will increase across the board.

The one group of people who will be getting screwed in the deal are those who are in Obamacare, because any increase in their wages will be more than offset by the hit they take to pay for higher medical costs.


30 posted on 12/16/2014 5:53:27 AM PST by yefragetuwrabrumuy ("Don't compare me to the almighty, compare me to the alternative." -Obama, 09-24-11)
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To: pieceofthepuzzle

“Agreed, and when you are in uncharted territory you need the creativity and innovation that allows you to take advantage of uncertainty and to set the course and direction for everyone else in the world. We used to be able to do this.”

Amen! Living in the past or longing for the past, is often a path to personal and national economic misery.


31 posted on 12/16/2014 5:54:07 AM PST by Grampa Dave (The Democrats, who run America are too old, too rich, and too very/very white elitist losers!.)
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To: allendale
Thanks for posting this interesting look at what's happening here and around the world.

There is a global recession. If economies were booming, there would be great demand for oil and its by products. The price would be stable if not rising. The phony mirage of economic progress due to borrowed and printed money, will come to its inevitable crashing end.

32 posted on 12/16/2014 5:56:16 AM PST by Grampa Dave (The Democrats, who run America are too old, too rich, and too very/very white elitist losers!.)
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To: thackney

When oil is heading south and gold is heading northnorth watch out.


33 posted on 12/16/2014 5:58:21 AM PST by muir_redwoods ("He is a very shallow critic who cannot see an eternal rebel in the heart of a conservative." G.K .C)
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To: yefragetuwrabrumuy

Thanks for the best laugh of the day. If OboZo had a brain, like Clintoon, he would be taking credit for what’s happening. However, his Islamic Facist Enviralmentally infected brain hates America too much to realize what is happening under his watch, in spite of him.

“This really demonstrates how out of touch Obama is. Were Bill Clinton POTUS, he would be claiming credit for dropping oil prices at every opportunity.

Ironically, the reason Obama isn’t is because he is so ideologically rigid that he is miserable that oil prices are falling. Like many in his party, he wants gasoline prices at European levels, like $5-7 a gallon, because “gasoline is bad”, along with all other fossil fuels.


34 posted on 12/16/2014 6:00:14 AM PST by Grampa Dave (The Democrats, who run America are too old, too rich, and too very/very white elitist losers!.)
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To: thackney
There will be plenty of Commodity Pool Operators (CPOs) and some hedge-fund managers holding high-yield energy bonds that are taking it on the chin.


35 posted on 12/16/2014 6:02:33 AM PST by Tolerance Sucks Rocks (The mods stole my tagline.)
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To: thackney
First time I've heard rising oil prices would be good news. The world has turned upside down.
36 posted on 12/16/2014 6:08:23 AM PST by McGruff (Ummm...)
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To: thackney
The title is exactly 180 degrees out of phase. Boy, there must be a lot of investment gamblers about to lose their shirts on this one. I heard an ad on the radio the other day asking ‘smart’ investors who had $40,000 laying around to put it into oil stocks because oil was never going to go down in price. Even the lowliest investor knows that what goes up in price will eventually come down. It sounds a lot like the big bank gamblers in 2007 who said the world would end it they didn't get a humongous taxpayer bailout.
37 posted on 12/16/2014 6:13:21 AM PST by iontheball
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To: McGruff

That wasn’t what the article said.

It gave a reason for the falling prices.


38 posted on 12/16/2014 6:13:51 AM PST by thackney (life is fragile, handle with prayer.)
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To: iontheball
Plenty of steady folks have those in their retirement account, not just investment gamblers.


39 posted on 12/16/2014 6:15:52 AM PST by thackney (life is fragile, handle with prayer.)
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To: thackney
Rapid fall in oil prices may portend global recession

Wow, who would ever have thought that?

40 posted on 12/16/2014 6:20:18 AM PST by The_Media_never_lie (The media must be defeated any way it can be done.)
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