hoodleehoo
Rookie
- Feb 2, 2015
- 2
- 1
- 1
Okay, I'm kind of a dunce when it comes to this stuff, so bare with me.
I live in Oklahoma, and there's a lot of debate about the impact of low oil prices on our economy. There's also debate on what is causing the low prices.
QUESTION #1
What is the cause? From what I could find online, it seems the consensus is that the cause of low prices is from lower demand for foreign oil caused by:
1) non-US countries struggling economically and not able (or needing) to buy as much foreign oil.
2) Domestic US oil is actually at a surplus right now because of shale oil, horizontal drilling, and fracking. "Experts" say we now have enough to last us at least a couple hundred years. So, we have less need for foreign oil.
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QUESTION #2
Why would this impact our economy in a bad way? Oklahoma is an energy state which I assume means there are 3 primary ways we are employed by energy companies...
1) People work for domestic energy companies.
2) People work for companies who buy and sell foreign oil.
3) People work for companies who do contract work over in the middle-east.
I can understand why people who do contract work overseas would be negatively impacted, but why would the other companies be hurting?
Domestic energy companies should be doing really well if the rise in domestic energy is causing less demand for foreign oil, right?
And companies who buy and sell foreign oil shouldn't be affected by falling prices since it shouldn't affect their margins, right? The oil they buy is less so they can sell it for less, but the profit margin should stay the same. Am I missing something here??
I live in Oklahoma, and there's a lot of debate about the impact of low oil prices on our economy. There's also debate on what is causing the low prices.
QUESTION #1
What is the cause? From what I could find online, it seems the consensus is that the cause of low prices is from lower demand for foreign oil caused by:
1) non-US countries struggling economically and not able (or needing) to buy as much foreign oil.
2) Domestic US oil is actually at a surplus right now because of shale oil, horizontal drilling, and fracking. "Experts" say we now have enough to last us at least a couple hundred years. So, we have less need for foreign oil.
---------------
QUESTION #2
Why would this impact our economy in a bad way? Oklahoma is an energy state which I assume means there are 3 primary ways we are employed by energy companies...
1) People work for domestic energy companies.
2) People work for companies who buy and sell foreign oil.
3) People work for companies who do contract work over in the middle-east.
I can understand why people who do contract work overseas would be negatively impacted, but why would the other companies be hurting?
Domestic energy companies should be doing really well if the rise in domestic energy is causing less demand for foreign oil, right?
And companies who buy and sell foreign oil shouldn't be affected by falling prices since it shouldn't affect their margins, right? The oil they buy is less so they can sell it for less, but the profit margin should stay the same. Am I missing something here??