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Low oil prices would allow companies increased profits because companies like UPS, airlines etc arent paying so much for fuel.
increased profits should increase the stock market, except in the upside down world we live in where lower prices encourage competition.
Cant have that, can we?
Maybe, maybe not. Transportation companies tend to buy "futures" in oil products hoping to book supplies when prices are low to protect them when prices are high. If they get it wrong, they are left with being forced to buy oil at prices that are higher than market.
It's not clear that many predicted that oil would go this low.
The theory was that China was going to start using more and more oil but their economy is stalling. We could go into free fall right behind them. The rules are different in a world economy. We haven't figured out the game yet.
Not only oil, but copper, timber, steel, etc. That's why commodities have dropped off a cliff, China is correcting itself from the oversupply it's built up in it's housing market/infrastructure boom and how it's command style economy has run into the "free market". China has many large government controlled companies that didn't/don't have to worry about shareholders and cost control and profit so it will be interesting to see how the Chinese handles this correction and what type of economy will be there afterwards.
India, Indonesia, Mexico, Africa all have varying levels of potential growth and billions of potential new global customers.
There is less incentive to seek for more oil if there is very little profit... which means there will be less need to employ people. Businesses have to adjust how they operate if they want to stay in business. Large changes in a short time frame means drastic adjustments by businesses to the point where one oil service company has laid off 20,000 people since 2014.
When companies have lower overhead, they are more willing to spend on costs and thus hire more people.
Maybe, maybe not. Transportation companies tend to buy "futures" in oil products hoping to book supplies when prices are low to protect them when prices are high. If they get it wrong, they are left with being forced to buy oil at prices that are higher than market.
It's not clear that many predicted that oil would go this low.
Yes but the seller of those futures are still making the profits, thus its a revenues neutral transaction..
This is basic economics..
Price a the pump good for the consumer. Now not spending as much money on gas. Spending it else where.
Price at the pump bad for oil companies, and stock investors who loved the gravy train, they were USE to over priced oil when it was 3.00 dollars a gallon. Along with the stock traders.
The issues in the stock market are stock market issues and predictions and futures. Also many other factors. Which is how it always was. What do think happened long before the stock market. The stock market is a place for investors to lose money and gamble money. If you put your retirement into the stocks its a gamble.
Low oil prices would allow companies increased profits because companies like UPS, airlines etc arent paying so much for fuel.
increased profits should increase the stock market, except in the upside down world we live in where lower prices encourage competition.
Cant have that, can we?
Problem is, Americans in aggregate have run up entirely too much debt and that debt has to be repaid, and Americans re repaying in instead of spending it in the economy.
the very first problem is labeling these people as "experts". That title is highly subjective.
I certainly agree with you there.
Quote:
Originally Posted by Loveshiscountry
What part about this don't you get.
Again It means we spend our money elsewhere and that create jobs.
The oil companies are still making billions in profits and for some reason that means they'll lay people off?
of course it's good for the economy. Who in their right mind wants to spend more for something than less. Shills for the oil companies would.
Because you don't understand economics. If you did you wouldn't make silly comments while ignoring the fact that we the people will spend our money elsewhere and that will create jobs. let the free market decide.
That's not true.
It's not the product, it's the manipulation.
Neither of these statements are true either. Prices have been low for quite awhile, where's all the layoffs? Prices are expected to stay low, not rise.
What an absurd statement. Oil companies are not losing money. They are making huge profits still. Did the profits go down from last year? Sure but in no way shape or form are they losing money.
Exxon Mobil Corp. said revenue and profit slid in its third quarter as ... Texas, company reported a profit of $4.24 billion A third quarter profit of 4.24 billion is losing money?
Lol...I was hoping that it wasn't just me losing my mind at all of this "prices too low" nonsense.
Quote:
Originally Posted by pghquest
You do understand that much of the goods you buy now, were actually made last year etc, and thus overhead costs are dictated by past costs, not a guessed future.. right?
Come on...oil prices have been falling for a LONG time, and we've seen no relief on the shelves at the stores.
You mean to tell me that every can of beans at my local grocery store is a product of $4.00 a gallon diesel prices?
I just think when you are considering large amounts of people, it's not good for a lot of change to occur in a short time frame. People need time to adjust to changes. I am not saying there should be no change, just not too much at one time.
There is less incentive to seek for more oil if there is very little profit... which means there will be less need to employ people. Businesses have to adjust how they operate if they want to stay in business. Large changes in a short time frame means drastic adjustments by businesses to the point where one oil service company has laid off 20,000 people since 2014.
So what?
Then don't do any oil exploration if it's not worth it. Life goes on. There are plenty of sources of oil in this world. No one has a right to a lifetime stable job in the oil industry....an industry that has ALWAYS run on a boom bust cycle.
Why is it so important now that they NEVER bust occasionally? Please....gimme a break man.
None of you were whining when gas was sky high, but now that it's low, the sky is falling.
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The rules are different in a world economy. We haven't figured out the game yet.
