An Analyst On TV Stated That Low Oil Prices Would Not Be Good The Economy-Is That Right? (unemployment, gas prices)
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You are asking a very complicated question. I've thought for decades that the lower the oil price, the better for our economy. We have seen that philosophy challenged lately with the economy and stock market falling when oil goes down and rising as it goes up....my question would be is oil price following the economic data or the reverse? I'm not expert enough in this area to say so I would like to hear from someone that is.
I work for an American engineering company that most of our revenue comes from oil companies and most of our business is outside the USA. So our stock price rises ad falls depending on what the oil price does because our clients will have either more or less money to invest in projects based on the price of oil. A price below $50/barrell means that our clients aren't expanding with new projects.
Until some energy source is able to replace oil and gas, I think the price below $50/barrell is overall not so great for the economy but that's just my opinion and would be happy to hear others views.
The idea that high oil prices are good is limited to a small section of the economy. Supply and demand should dictate the cost, yet today gambling in the commodity pits dictate the price.
Oil prices are reflected in the entire economy . Anything we purchase or produce is affected by the cost of oil. Increases lead to run away inflation (see late 1970's oil embargo). It could take decades for wages to catch up with that inflation.
We are watching now as the GOP still will not support increased minimum wages but are happy to see oil prices go up.
The idea that high oil prices are good is limited to a small section of the economy. Supply and demand should dictate the cost, yet today gambling in the commodity pits dictate the price.
Yep. Hedge funds should not be in this market. It worked well for decades before they were allowed to screw with the markets. In those decades, oil was pretty stable. It doesn't go from $40 to $150 to $35 because of supply and demand. It does that because of irrational markets.
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Oil prices are reflected in the entire economy . Anything we purchase or produce is affected by the cost of oil. Increases lead to run away inflation (see late 1970's oil embargo). It could take decades for wages to catch up with that inflation.
We are watching now as the GOP still will not support increased minimum wages but are happy to see oil prices go up.
For most the less paid at the pump the more saved to buy other things which helps with sales. Its only the rich who own oil stocks that benefit from high prices
I hear unemployment is higher in Texas than California right now. Low oil prices almost certainly have something to do with that. When the price of oil is low, many oil wells are no longer profitable to run and must be shut down. This, of course, is bad for some local economics. Consumers on the other hand benefit from lower gas prices. This allows them to save or spend more, which can be beneficial. Doesn't really make up for the loss of high paying oil jobs though.
Many industries are cyclical, and this is particularly true of oil, along with many other resource extraction industries.
Cheap oil does not make American gas/oil production feasible.
When prices are high, there are more jobs in our fossil fuel industry.
Which only matters to those in that field. There will be less jobs in other industries since more of our money is spent on oil and not on other products or services.
Lower oil prices means we the people will spend it in other industries and we will need people to service those needs.
For most the less paid at the pump the more saved to buy other things which helps with sales. Its only the rich who own oil stocks that benefit from high prices
Bingo! The only industry hurt is the oil industry and related to oil businesses. That analyst works for the oil industry. Fake news.
We sell a product that is an impulse buy in convenience stores etc.
Anyone remember when Hostess(!) went bankrupt. That was during very high oil prices. Soda sales and everything else is hurt cause all the money is burned up filling gas tanks.
Go to a travel center and ask a long time employee what happens to sale of store items when oil prices are high.
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