That depends on perspective. If you live in oil country I can see this as being viewed as an entirely negative thing. But it's a double edged sword, as every dollar not being fed into the fuel pump is being spent elsewhere in the economy.

At the moment most are saying that this will be a net positive thing for the economy because it will boost consumer spending in other areas. But there's no doubt about it, those connected to the oil industry may fall under some really tough times.

 

I agree with what Tom said. I've heard many economists say that cheap energy generally goes hand-in-hand with a strong overall economy, but also that a drastic cut in oil prices doesn't necessarily mean you'll generate a booming economy.

Jason

 

It's a tricky balance for middle east oil suppliers. If they get the price too high than processing oil like sands oil becomes economically viable. If the price is too low the energy companies don't make enough profit and are forced to sell more oil to make up the difference. A free market will find equilibrium over time which probably means oil prices will rise again at some point.

In order to keep energy independence moving forward you would think the government would have lower taxes on new types of oil production and higher taxes on older tradition oil. I guess the problem would be who would vote for a politician that raise gas prices.

In the mean time I will enjoy filling up with one credit card swipe.

 

Yep, I think it will go under $2. This price regression has gone below what most would have predicted. Current oil futures are trading at $57.78 per barrel at the moment, which is well beyond the $60/barrel that most of us didn't think we'd see.

While the selfish part of me wants this to continue, this will really hurt our domestic energy sector and hinder our path to energy independence.

 

i did and it was great, got allot of the morons out of alaska, they seem to be back again though, its a cycle that WILL repeat itself.

 

Crude is dropping, and will continue to drop. Reason being is that North Dakota and Texas can not produce crude through fracking at $58.00 a barrel and make money. OPEC want's to get the U.S. producers out of the market. They can sell crude at real cheap prices whereas here in the U.S., we can't.

The above statement is not a political comment, but rather an economic analysis based off some things I've read and heard.

I hope to see diesel drop some more. It's under $3.00 in some places, but not here.

 

Here's an interesting article that provides an idea of what's going on. This may be a bit deep for you Skip.

How Crude Oil?s Global Collapse Unfolded - WSJ

 

Several big names in oil production announced 20-50% cuts in capital expenditures for next year, and drilling is the biggest capital expenditure. I am currently working for an oilfield services company (water and sewer, mostly) so no new wells means no work for this company, and if the trucks aren't moving then I don't have to fix them, so I'm heading home next week. Besides, this place is insane.

 

Don't have a subscription to WSJ so I can't read it.

 

Damn, forgot about that.

For anyone who's interested:

https://drive.google.com/file/d/0B2j...ew?usp=sharing

 

Sorry to hear that Jared, hope you find another opportunity soon.

 

It really is amazing, and I see the same thing in my 40 mile one-way commute from the Cleveland, OH suburbs to Akron. My neighborhood was selling regular for $2.45 yesterday, and I saw as high as $2.59 and as low as $2.3x. I work afternoons, and in the morning, our local Sunoco was at $2.39, but Shell was still selling regular for $2.45/gallon.

 

All I'm going to say is b.s. High gas prices stiffle the economy because all a person's money goes in the tank. Americans are expected to save $100 million in 2015 with stabile/lower prices, and they won't save. They will spend at the malls. I have an extra couple dollars a week, and it feels nice filling for $40 instead of $54. Station owners are loving it also because consumers are filling-up instead of putting $10 or $20 in the tank. Also, they have the highest margin ever with a .21 difference between the price they pay and the price we pay. Plus, drivers have Cash for snacks and other overpriced stuff. So, who benefits from high oil prices - the CEO and the guys putting in time drilling and refining, but not us regular folks trying to make a living.

 

I know right now any 15 time convicted felon can get a good job in the oil/gas business. My foreman is 23 years old making $3500/week. Going to a new job in a month or two that is supposed to last 2-3 years.

Maybe some sectors of the industry will suffer, but the company I work for hires 10 people twice a week. Working 12-18 hrs a day 6-7 days a week.

I'm not worried about losing my job.

 

Good for you!


Reality is, I need to live off my net worth. My net worth drops around $5000 for every 10 cents per litre drop in gas prices. Yup, the market is dropping because of the weak oil prices, but the good news is the market will eventually seek equilibrium and if lower prices is the new reality, the rest of the market will adjust, (eventually).

As to high prices at the pump, I hope everyone realizes that $1.00 CDN/Litre is the equivalent of more than $4.00 US/gal. It has been as high as $1.40 CDN/L, so now we think we're getting a deal.
European prices are even higher. Strange thing at our pumps is while gas has plunged, diesel remains at around $1.22 CDN/L. If fuel costs truly were tied to the price at the wellhead, we should be paying the same price as the last time oil was $60 per barrel. Sadly we are not.

As usual, we, the consumer are being had!

Time to go get fitted for my tinfoil hat.