The Price Of Oil Is Crashing Again, And That Is Very, Very Bad News For The U.S. Economy

LC News Group ^ | 7/2/2016 | Michael Snyder

[HomerBohn]

Good idea. Perhaps a Conservative advisor (one not a member of CFR)to President Trump will advise that this be done.

Meanwhile, I can think of two oil companies that sell only U. S. fuels at their station: Murphy USA and Valero.

[Dacula]

Georgia just instituted a new gas tax last week and the cost of gas went up overnight by .25 a gallon.

We went from $1.75 to $2.00 a gallon. Got to pay for all those toll roads that they building here.

[HomerBohn]

No. I stated 8 cents.

[Texas resident]

Post of the year.

I hope Mr. Trump reads your post and uses it word for word.

[central_va]

I was just quoted $1.79. So it is 79% more for propane in VA than MN. THAT MAKES NO SENSE. This why the energy sector loses the trust of the American people.

[PapaBear3625]

All these people hallucinating future trade wars when we’re in the middle of one. OPEC is determined that the USA will not have a powerful energy complex.

Their oil will not last forever. That's why they are pushing their underclass to move to the US and Europe, to reduce economic pressure on Muslim states.

[Tax-chick]

Every time the price of gas gets low, the NC legislature discusses raising the tax, just because they figure they can get away with it. Since it's a per-gallon charge, they get more revenue from it with gas prices low ... but hey, you can always shaft the citizens a little more ...

Got to pay for all those toll roads that they building here.

LOL - good one.

[xzins]

Lower prices are due to Saudi Arabia trying to run frackers out of business. That’s the bottom line.

[Rome2000]

Bomb the oil fields in Saudi, Iran, and Venezuela.

Problem solved.

[Eric Pode of Croydon]

Back when gas was $3.75 a gallon, and every waitress in North Dakota was driving a new F-350, I sucked in my gut, broke out the red pencil, and figured out a way to keep my business alive.

In particular, one thing I did NOT do was whine to the government, demanding protection for my business model.

What goes around, as they say, comes around.

[MeneMeneTekelUpharsin]

Don’t fuel prices generally fall right before Presidential elections, especially if Democrats are in power to keep the electorate happy?

[nathanbedford]

But overall, the lower the cost of energy, the greater the ability of our economy to grow.

Indeed, a reduction in the price of oil is analogous to a tax cut. It might be argued that it's been the decline in the price of oil that has staved off recession.

I am not clear whether it is a surfeit in the supply of oil resulting from Iran coming onto the market and going into head-to-head competition with Arabia in a context of American fracking, or whether the slowdown in China and elsewhere has driven down demand, or all three which have brought oil down $40 a barrel.

Whatever the cause, the effect on Vladimir Putin is devastating. Think of Russia as a giant gas station which requires $80 a barrel oil in order to filter money down through the apparatchiks to sustain the present regime. Workers at the Salzburg airport will tell you that when oil went down Russian tourism infamous for its profligacy came to an end. $40 a barrel oil will do more for America's relative standing compared to Russia in the world than all the red lines ever drawn by Brack Obama.

There is very little to see that is not positive in $40 a barrel oil.

[MeanWestTexan]

Pretty much everything in your post is wrong.

First, producers are upstream of the pump and sell their crude way before, generally at the wellhead.

Second, countries are members of opec, not producers. The USA is not a member country.

Third, price is set at what is essentially an auction, just like stocks and most big commodities. No one except maybe Saudi has the ability to lower or raise the price by increasing or decreasing supply, and it comes at a loss of either market share or price, respectively.

[Roccus]

I’ve only been buying bulk delivered propane for 15 years and have NEVER seen it below $1.00 here in North-Central WV.

Without the summer fill-up discount, it would be the exact same price I paid in January...$1.935.

[P.O.E.]

Predatory pricing from a predatory people.

[P.O.E.]

Predatory pricing from a predatory people.

[Graybeard58]

No. I stated 8 cents.

#############################

No, in the first paragraph you stated 8 cents. In the third paragraph you stated .08 cents.

Maybe you meant $.08 in the third paragraph.

[Mich Patriot]

I’m right there with you as well. Also, the ‘broken window fallacy’ comes to mind here. While the oil industry may lose jobs (at least temporarily), consumers have more money to spend elsewhere, supporting or increasing jobs in other industries. Thanks ECON 101.

[central_va]

We learned in WWII that bombing oil fields is not real easy. It is hard to hit oil pipes from the air. They are not a big target. Look up Ploeste Raid.

[Roccus]

See my #54