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Offensive Star [330]
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Ultimate Clemson Legend [108278]
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Yep. They're going to start a price war.
May 4, 2025, 12:19 PM
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When Trump announced the tariffs, that's a huge hit on shipping and oil consumption. Taking advantage, OPEC+ announced increases in production. This will drive the cost of oil way down. Great, right?
No, not great. Just remember, when adjusted for inflation, gas prices at the height of the gas crisis in the 1970's, were roughly what the current PPG is in the US.
Below $70-something, whatever a barrel, fracking becomes cost prohibitive. Get oil down to $50 a barrel and fracking stops, oil jobs are lost, US production tanks, and well.....
Anyway, is what it is. With global demand down, OPEC can take market share from the US pumping cheaper oil.
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Clemson Icon [25112]
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Re: Yep. They're going to start a price war.
May 4, 2025, 12:23 PM
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Its terrible for the US oil industry of course. Good for us.
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Ultimate Clemson Legend [108278]
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It's like when my home's value doubled during covid. Great right?
May 4, 2025, 12:51 PM
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No, horrible. Before covid, I could afford to sell my house, and buy it back, no problem. I could sell my house, and move to a similar house nearby easily.
After covid, if I sell my house at the inflated market price, then pay off my loan, and then buy the very same or similar house back at the current inflated prices, use 100% of my equity as a down payment and finance the rest, my mortgage payment almost triples.
That's NOT GOOD. This is why the housing market is literally paralyzed, and has been for a while now. Until values tank, or people are forced to sell, or rates drop, the housing market is stuck in neutral.
Like I've mentioned many times, there were economic numbers from the 1970's we would consider amazingly good today, BUT in the 1970's the economy overall sucked. If we get those numbers again, today, the rest of the economy will suck too. Gas is dirt cheap during recessions. Is that "good"? Humm.......
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Associate AD [1096]
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Re: Yep. They're going to start a price war.
May 4, 2025, 1:24 PM
[ in reply to Re: Yep. They're going to start a price war. ] |
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Oil, chemicals, and pharmaceutical industries affect every other part of our economy. I haven't worked directly in oil for 30 years, but my salary ends up tied to those higher paying sectors through surveys. When those industries do well, everybody does well. Cheap gas is fool's gold (both petrol and natural gas).
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Offensive Star [330]
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Re: Yep. They're going to start a price war.
May 4, 2025, 12:29 PM
[ in reply to Yep. They're going to start a price war. ] |
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I am well aware of what lower oil prices portend, worked in that sector for decades.
Saudi needs $95+ to run the country since oil pays the bills. Their production costs are roughly $10 so they can make a profit on way lower prices but then may have to cut back on stuff for citizens.
We are rolling to what I hope is just a recession, several things could bring on something far worse.
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Ring of Honor [22142]
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There actually is a range for oil prices thats best for the US economy
May 4, 2025, 2:09 PM
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Big oil and Texas politicians know this. Increased global supply mixed with lower demand will undoubtedly lower prices but also curtail domestic production and certainly new wells. Some business sectors will have favorable economic variances, other tied to domestic production not so much.
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Ultimate Clemson Legend [108278]
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Cheap energy is a sign of a bad economy.
May 4, 2025, 5:41 PM
[ in reply to Lutz. ] |
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Demand drops. Supply increases. Prices drop.
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National Champion [7673]
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Re: Yep. They're going to start a price war.
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May 4, 2025, 5:10 PM
[ in reply to Yep. They're going to start a price war. ] |
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Cheap oil may not be ideal for those evil oil companies but it's great for most other sectors and has one of the largest impacts on inflation as every single industry and every single consumer is benefitted by cheaper energy costs.
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Legend [6810]
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Game Changer [1938]
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Good, hopefully we can get it back to where it was
May 4, 2025, 12:23 PM
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when Biden left office, and get it even lower.
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Offensive Star [330]
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Re: Good, hopefully we can get it back to where it was
May 4, 2025, 12:32 PM
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You may not like what lower gas prices brings with them though.
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Clemson Icon [25112]
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Re: Good, hopefully we can get it back to where it was
May 4, 2025, 12:38 PM
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And what is that?
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Offensive Star [330]
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Re: Good, hopefully we can get it back to where it was
May 4, 2025, 7:05 PM
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Recession hopefully and nothing worse.
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