Is This Just Hype?

[william the wie]

Most of the world imports much more energy than it exports. Energy is a material expense in every good and service.

Amount of energy in watts used also equates to GDP.

As the costs of goods and services decline with energy prices this will have deflationary effects in China, Japan and the Euro-Zone raising real interest rates.

As energy prices decline potential GDP-fixed charges (debt mostly) can climb until prices drop to where fixed charges cannot be covered.

Hysterical claims are made on both sides of this argument so I was wondering what the consensus figure is on what price per barrel will cause financial distress.

 

[Mr. H.]

I'll take $40, Alex.

 

[william the wie]

Thanks

 

[Sonny Clark]

Lower gas prices will not cause a "downturn". If anything, lower gas prices will bring gasoline back to normal. For way too many years, big oil has been milking the cash cow for all it's worth. The only down turn will be a temporary lose of oil industry jobs, and maybe a little tax revenue. Think of it this way, if you don't mind. When the price of gasoline was between $4.00 and $5.00 a gallon, and in some areas, above $6.00 a gallon, did big oil feel guilty for causing many to struggle making ends meet? Did oil field workers complain about fat paychecks and living the easy life? Did commodity brokers complain about fat bonuses? Also, the old saying, "what goes up must come down" happens in a lot of industries, and they survive. Low gasoline prices is not the end of the world, nor a sign that an economic collapse is sure to happen any day.

We have many more signs of an economic collapse to worry about, many. We have home prices that have fallen in the past 7 years, yet we're surviving and watching home prices inch back up in some areas. Fluctuations in prices is a normal occurrence, and to be expected. It happens with food, rent, and clothing. Economies revolve around price fluctuations, including currency values. The time to worry is when consumers can no longer make a living and prices are so high than many become homeless and destitute. ( we may be headed in that direction as we speak )

 

[Mr. H.]

“The idea behind this question was simple — at some point oil prices aren’t just a nice theoretical tailwind for global economies,” said Nicholas Colas, chief market strategist at ConvergEx, in a note. “Rather, they become a signal that worldwide demand is contracting so quickly that oil prices must quickly decline to reflect that fact.”

If oil drops below 30 a barrel brace for a global recession - MarketWatch

 

[Mr. H.]

Lower gas prices will not cause a "downturn". If anything, lower gas prices will bring gasoline back to normal. For way too many years, big oil has been milking the cash cow for all it's worth. The only down turn will be a temporary lose of oil industry jobs, and maybe a little tax revenue. Think of it this way, if you don't mind. When the price of gasoline was between $4.00 and $5.00 a gallon, and in some areas, above $6.00 a gallon, did big oil feel guilty for causing many to struggle making ends meet? Did oil field workers complain about fat paychecks and living the easy life? Did commodity brokers complain about fat bonuses? Also, the old saying, "what goes up must come down" happens in a lot of industries, and they survive. Low gasoline prices is not the end of the world, nor a sign that an economic collapse is sure to happen any day.

We have many more signs of an economic collapse to worry about, many. We have home prices that have fallen in the past 7 years, yet we're surviving and watching home prices inch back up in some areas. Fluctuations in prices is a normal occurrence, and to be expected. It happens with food, rent, and clothing. Economies revolve around price fluctuations, including currency values. The time to worry is when consumers can no longer make a living and prices are so high than many become homeless and destitute. ( we may be headed in that direction as we speak )

You're such a Brotch.

 

[JakeStarkey]

WTI and Brent dropping below $40 will cause lots of distress.

We had been collecting and leveraging capital through the middle of the last decade to be ready for the Great Depression.

We bought a lot of property, particularly rental condo in Salt Lake City and St George.

 

[Sonny Clark]

Lower gas prices will not cause a "downturn". If anything, lower gas prices will bring gasoline back to normal. For way too many years, big oil has been milking the cash cow for all it's worth. The only down turn will be a temporary lose of oil industry jobs, and maybe a little tax revenue. Think of it this way, if you don't mind. When the price of gasoline was between $4.00 and $5.00 a gallon, and in some areas, above $6.00 a gallon, did big oil feel guilty for causing many to struggle making ends meet? Did oil field workers complain about fat paychecks and living the easy life? Did commodity brokers complain about fat bonuses? Also, the old saying, "what goes up must come down" happens in a lot of industries, and they survive. Low gasoline prices is not the end of the world, nor a sign that an economic collapse is sure to happen any day.

We have many more signs of an economic collapse to worry about, many. We have home prices that have fallen in the past 7 years, yet we're surviving and watching home prices inch back up in some areas. Fluctuations in prices is a normal occurrence, and to be expected. It happens with food, rent, and clothing. Economies revolve around price fluctuations, including currency values. The time to worry is when consumers can no longer make a living and prices are so high than many become homeless and destitute. ( we may be headed in that direction as we speak )

You're such a Brotch.

Thank you. Sometimes you can be so nice.

 

[TheOldSchool]

One day it will be $0. And there will be tons of robots.

 

[percysunshine]

.
"At what point will lower energy prices cause a downturn"

Pineapple.

.

 

[Mr. H.]

Lower gas prices will not cause a "downturn". If anything, lower gas prices will bring gasoline back to normal. For way too many years, big oil has been milking the cash cow for all it's worth. The only down turn will be a temporary lose of oil industry jobs, and maybe a little tax revenue. Think of it this way, if you don't mind. When the price of gasoline was between $4.00 and $5.00 a gallon, and in some areas, above $6.00 a gallon, did big oil feel guilty for causing many to struggle making ends meet? Did oil field workers complain about fat paychecks and living the easy life? Did commodity brokers complain about fat bonuses? Also, the old saying, "what goes up must come down" happens in a lot of industries, and they survive. Low gasoline prices is not the end of the world, nor a sign that an economic collapse is sure to happen any day.

We have many more signs of an economic collapse to worry about, many. We have home prices that have fallen in the past 7 years, yet we're surviving and watching home prices inch back up in some areas. Fluctuations in prices is a normal occurrence, and to be expected. It happens with food, rent, and clothing. Economies revolve around price fluctuations, including currency values. The time to worry is when consumers can no longer make a living and prices are so high than many become homeless and destitute. ( we may be headed in that direction as we speak )

You're such a Brotch.

Thank you. Sometimes you can be so nice.

You're welcome, Petula.

You invoke the term "Big Oil' as milking a cash cow for "way too many years". That alone speaks volumes of your ignorance.

 

[william the wie]

Sorry Sonny, oil as an investment sucks.

 

[Mr. H.]

Sorry Sonny, oil as an investment sucks.

It's turned out to a very lucrative investment for me and my company. It's just that right now, yes it sucks.

 

[HenryBHough]

The important thing is where oil prices will go when the Saudis figure they've sufficiently wiped out exploration and development elsewhere. Not only will prices rebound they'll be "enhanced" by a flock of new and improved taxes liberals at state and local levels will lard on using low base prices as cover.

You think they were high earlier this year?

Chances are good you'll still be alive and needing fuel years after the real gouging begins. So enjoy it while you can.

 

[Dogmaphobe]

A downturn?

Cheaper gas prices are causing an upturn where I live. With less money allocated for gasoline, people have more to spend on other goods and services.

 

[william the wie]

A downturn?

Cheaper gas prices are causing an upturn where I live. With less money allocated for gasoline, people have more to spend on other goods and services.

And it will continue to do so until deflation causes debts to be unserviceable.