Editorial: "Oil Price at $90 Is Enough to Save Global Economy" (brokers, mortgage)

[delusianne]

July 30 (Bloomberg) -- There is nothing harder to distinguish than a bull market pause and a turning point. It is only in hindsight that you can tell one from the other.
This month's decline in the price of oil -- to $123 a barrel from a peak of $145 -- looks like that point has arrived.

It may well be enough to dig the financial system out of its mess. Oil at a more sustainable $80 to $90 a barrel would suddenly make the economic weather feel a lot sunnier. With inflation under control, central banks could cut interest rates again. Property markets would stabilize, helping banks to begin lending and to reinvigorate the global economy.
...
In short, the laws of supply and demand are reasserting themselves. Lehman Brothers Holdings Inc. predicts oil will drop to $90 a barrel early next year.

Bloomberg.com: Opinion

What do you think? A temporary lull due to a drop in demand? Or will we return to a level of security?

Another article says Crude oil prices may fall to $80 - Sify.com

[PurpleLove08]

I honestly hope they don't drop.
Sure filling up my tank is not fun at all but I think the high price of energy is going to spark a lot of innovation and necessary changes we should have been making a long time ago.

I'm worried about the environment and I think the high price of oil is SOMEWHAT saving the environment.
People are not driving as much, more people are buying more fuel efficient cars, more people are taking mass transit if it's available in their city, etc.

The less dependent we are on oil, the better we are.

Set America Free

I think the drop in prices is due to a decrease in Demand. China and India are decreasing their fuel subsidies so the price of gas is going up in China and India, thus reducing demand. Also the demand in the U.S. has gone down.
http://www.dot.gov/affairs/fhwa1108.htm (broken link)

[NewToCA]

My prediction has been, and continues to be, oil at $70-$75 a barrel within the next year.

[tallrick]

Why not just stop creating new money? That will solve the inflation problem.

[Philosophizer]

Supply will fall faster than demand. Major oil fields are in decline. The dollar has no where to go but down in value. I can't see oil going below $100.

[bale002]

Originally Posted by LiveTodayLez08

I honestly hope they don't drop. ... the high price of energy is going to spark a lot of innovation and necessary changes we should have been making a long time ago.

....
People are not driving as much, more people are buying more fuel efficient cars, more people are taking mass transit if it's available in their city, etc.

The less dependent we are on oil, the better we are.

I agree. The high price of oil is like a fire under people's butts: the US economy and especially whining average Americans need fire-breathing dragons down their necks to force them to return to competitiveness mode.

As for inflation, I agree with tallrick: stop printing money, which only promotes more inefficiency. Like we need high oil prices, we also need higher interest rates to force US economic agents, starting with households, to return to competitiveness mode.

The US real estate market is doing fine, let them stop trying to "fix" it: they tried to "fix" it with artificially low interest rates, and, except for a few (construction companies, local politicians, bankers, mortgage brokers, some real estate brokers), we have all suffered the consequences, especially the up-and-coming productive who can't afford to set up a base anywhere because they "fixed" it.

Let energy prices go where they will, based on supply and demand, and let interest rates go where they will, based on supply and demand, and let the most productive make the most use of resources, and let them get the hell out of the way!

Just a guess now, but oil between $100-$140 a barrel and short-term interest rates of 5%-8% feel like a good equilibrium level: if you can't maintain a productive enterprise at these levels, then at least don't be a burdensome drag on those who can.