First  Prev  1  2  Next  Last
Post Reply Do you think low oil prices benefit the US economy?
1394 cr points
Send Message: Send PM GB Post
31 / M / That place beyond...
Offline
Posted 1/29/15 , edited 1/29/15
I think It does, but I've been noticing investors don't know what to make of it, perhaps because the US currency is getting stronger and is affecting earnings of companies
What do you think?
9200 cr points
Send Message: Send PM GB Post
35 / M
Offline
Posted 1/29/15
I think that investors are crying over spilt milk.

In general, investors tend to benefit from tragedy and suffer when news is good.

When there's a natural disaster, investors profit because there's typically a surge in demand, and supplies are lost.

When there's a glut of a product on the market, they lose because their products lose value.

All in all, generally anything that brings the stock market down I'm not horribly opposed to.

I think the gllut is mainly due to the middle east releasing large quantities of oil in order to combat plans in the US and other areas to tap into their own oil reserves. The cheaper gas is, the more costly the procedure becomes comparative to the gains. Unfortunately, once a government project is set into motion, it's difficult to stop it.. especially at this stage of the game.

Economically, I can see possibly shipping costs going down (but doubtful) and overall products SHOULD get a little cheaper, but it's doubtful. People are already used to inflated prices.

Ecologically, it's going to be hellish, but since I doubt prices of everyday things is going to radically plummet, I don't think it's going to do much.

People appreciate the lower gas prices, but overall, there's this sense of waiting for the hammer to fall, and for SOMETHING else to all the sudden spike in cost.

Really, the bigger problem is a lack of innovation and a forward motion in industry at large. Most jobs are about retail and retail related services. Until that switches to something else,we're stuck in a consumerist economy without any consumers... And that's a wicked cycle to be in.
31145 cr points
Send Message: Send PM GB Post
30 / M
Offline
Posted 1/29/15
It's a mixed bag, but I'd say in general it probably does more good than harm.

Remember, the U.S. is actually one of, if not the, largest oil producers in the world. With crude prices down so much the revenue for that industry is going to be feeling it.

Some corporations, like airlines, that use a lot of fuel pre-purchase it. Since the price of oil has dropped so rapidly many of them are kicking themselves because they're stuck in a contract buying fuel at a significantly higher-than-market price.
20904 cr points
Send Message: Send PM GB Post
22 / M
Online
Posted 1/29/15
While a stronger money tend to hurt investors, yet the common man find it useful and the money can circulate more freely in saving of average day man on oil, another example it that we will begin to import more.
What I know at the moment, Crunchyroll store so being nearly unaffected.
Imports from japan to us shall be risen since the downfall of the yen to 117 per dollar.
18608 cr points
Send Message: Send PM GB Post
Offline
Posted 1/29/15
good for me
60713 cr points
Send Message: Send PM GB Post
27 / M / United States
Offline
Posted 1/29/15

ivanchoFAA wrote:

I think It does, but I've been noticing investors don't know what to make of it, perhaps because the US currently is getting stronger and is affecting earnings of companies
What do you think?


No one realizes it but the larger OPEC countries will end up coming out ahead. The smaller oil producing companies will end up hurting from this and probably have their oil companies bought out by the larger companies. When that happens oil prices will sky rocket, Since they are not US companies they can have monopolies or trusts, and etc. That however is bad for the consumer, people don't realize this is not a good thing. Some welcome it as it helps them for now, others are powerless to change it. The government needs to step in but that would probably result in higher gas prices so no politician will touch it. Fuel prices will help the economy but once this temporary decrease expires the US economy will get hit twice as hard. We will see companies that were stable before the reduced gas prices crumble. Do I think it is a good thing no, it will probably be the last push to break the cracked glass ceiling our economy has been on for the last decade. Eventually the politicians will drive the country into so much debt we wont be able to pay it. The country needs taxes but most of that comes from the income tax. So when less people have jobs the country also suffers. Obama ran on a foreign policy platform during his first term so he did nothing to help our domestic economy. He has tried to do some domestic related stuff this term but is failing to help. There is now a tax if you don't get health coverage, if you can't afford it your out of luck. They say they will subsidize it but only people pretty much on welfare get that help, or if your job doesn't offer you anything. However employers don't often have cheap health benefits so if they do have it, no help for you and you get taxed. Most cheap health insurance also requires a high deductible like thousands of dollars, that basically means no coverage for you!

Overall I don't see the US economy getting better, it will slowly disintegrate. We made it a service economy and we have hardly any manufacturing to help stabilize the economy.
4752 cr points
Send Message: Send PM GB Post
29 / M / A rock in the mid...
Offline
Posted 1/29/15
By and large it's beneficial, consumer's have more money to spend, and energy costs for companies in all sectors effectively go down provided the price stays low enough, long enough. For those investing in oil as well, so long as they correctly predict the market direction, and don't get greedy and stay in their positions too long they'll come out with a profit too.
2462 cr points
Send Message: Send PM GB Post
31 / M / Minnesota, USA
Offline
Posted 1/29/15
Short term, maybe. Long term, I doubt it.
13496 cr points
Send Message: Send PM GB Post
24 / M / Scotland
Offline
Posted 1/29/15
Well, it certainly isn't helping the Scottish economy. Nonetheless, lower petrol prices allow people to have more money which people then use to spend more money which in turn earns the country money. Considering the amount of people in the US it seems likely that it'll help the country.
501 cr points
Send Message: Send PM GB Post
42 / M / A Mile High
Offline
Posted 1/29/15
Locally, we have already have some fracking companies laying off a bunch of employees. I can imagine in North Dakota and Wyoming there will be an economic collapse if oil prices remain low for an extended period. In regions with a more balanced economic base it will probably end up being a positive due to the increased amount of money middle and lower income families will be able to spend on other items.
7579 cr points
Send Message: Send PM GB Post
27 / M / Ark-La-Tex
Online
Posted 1/29/15 , edited 1/29/15
My state is getting hit hard by it. Louisiana is dependent on oil being ~$80/barrel. Combine that with years of our governor's economic mismanagement, and LA is now facing a budget crisis it hasn't seen in decades. Of course, the solution is to cut over $600 million from the education and healthcare funds because everything else is untouchable, per the state constitution. This place is so backwards, it's ridiculous.
Stenim 
45013 cr points
Send Message: Send PM GB Post
32 / M / Red Deer Canada
Offline
Posted 1/29/15
The lower oil prices is a plan cooked up to hurt russia's economy and it will be low for the next 2-3 years. Until russia finishes it's pipeline to china. The lower prices aren't going to hurt north american economies as much as people think. The prices are simiar to those 5-7 years ago and those oil companies are making 10's of billions of profit instead of 100's of billions
6250 cr points
Send Message: Send PM GB Post
M / United Kingdom
Offline
Posted 1/29/15
I think in the short term (providing low prices stick for a time) lower prices will benefit any economy as energy prices fall, so do production costs, raw materials, living costs etc... so long as your company isn't dependant on the energy industry for income you're sorted.

Long term, low oil prices mean little or no investment in production and facilities. I know the oil industry in the North Sea here in the UK are laying off staff and Shell and BP have said it's no longer profitable to invest so long as prices are below $80. So in 3 or 4 years when prices start to creep up as demand increases the oil fields here will not be in a position to increase supply, this won't be the only bottle neck so prices will further rise.

It's happened in the past, we haven't learnt from it and this time around it won't be any different. We have to face the reality and we won't stop using fossil fuels and will live with this up and down cycle until every last possible bit has been burned . Then the politicians will turn around to us and say 'Bugger'.
105 cr points
Send Message: Send PM GB Post
22 / F / Outer Space
Offline
Posted 1/29/15
From what I've heard the lower gas prices are an attempt to get rid of alternative energy competitors. Basically they want to reduce the prices so low that people won't want to invest in electric cars. Once they've determined that their competitors won't be a problem, the prices are going to jump again. I have no idea if this is the real reason but i've heard it a couple times from different people, make what you will of it.

The lower prices is acting like a small jumpstart to the floundering economy, just enough to get people to start spending a little bit more but not enough to bring back the value of the US dollar. This isn't enough to fix the enormous national debt but it's more of an attempt to try and stay afloat without digging ourselves into a deeper hole. On the flip side, a lot of countries who have profited from selling oil to the US are hurting. Saudi Arabia is know was facing a big deficit in the beginning but I'm not sure how things have changed since then.
17771 cr points
Send Message: Send PM GB Post
33 / M / outer wall, level...
Offline
Posted 1/29/15 , edited 1/29/15
i think USA needs to blow lots of money on oil.
look at the number of auto trans in usa, 10% loss in FE right off the bat.
look at the number of V8 8000lbs trucks.
or the lack of small diesels. VW makes a great 50 mpg non hybrid diesel that will outlast the damn lipo pack in the prius.

USA is not concerned about forgien oil, if ti was, the auto market would be very different. like the return of 1liter engines.
ford makes a 1liter turbo, 125 hp.
theh honda civic has been getting 100hp per liter for along time.
chevy v8, 5.7 liter do not get 570 hp, not on production cars anyways.
v8 diesles are a nice thing.

in the end, AMericans dont really, truly care about where there oil comes from or how much it cost, at a goverment level anyways.
First  Prev  1  2  Next  Last
You must be logged in to post.