Oh thanks. That settles it then. Thanks for clearing this confusing stuff up for us.
I agree. All of manufacturing makes money as well as transportation of goods when oil drops in price. The way the stock market used to work was, when oil dropped, equities rose. Now it looks like Wall Street borrowed money to buy oil and they lost the bet.
They're a retailer but their greatest asset isn't their retail business it's their web services/cloud business where they're really making their money.
In short yes. Yes it does.
When I say break even I'm not referring to a fiscal break even price for the country which is what you're talking about and the article you linked refers. I'm talking about what it costs them to produce a barrel of oil and that figure is something under 10 dollars/barrel. So if oil is above 10/barrel they're above break even and making money, that's what I mean. It's why I refer to the Saudis putting some of these "new" or smaller oil companies out of business where it can be costly to pull oil out of the ground with some of these newer methods and for them pulling oil out of the ground can cost 50-60 bucks a barrel.
I think this massive drop in oil is short term as well but what does short term mean that I don't know. A few years maybe, a little more or a little less could be. I don't know. But part of the issue is oversupply not just weakened demand and I can't see the Saudi's pumping oil at this rate forever without it hurting them as well. Judging from the article above and the possible IPO of Saudi Aramco it's affecting them to a degree already. Also don't know that it will go back to those crazy peaks any time soon but maybe around 50-70 a barrel a handful of years down the line.
It'd actually be an opportunity. But we'd screw it up like we always do.
I disagree. Once the oil money runs out, they are no more dangerous than radical Africans. Boko Haram and Al Shabbab are big problems if you live in Nigeria and East Africa. They are somewhat of a problem in Europe by the secondary effect of spurring migrant waves. In the US - no one even knows who they are. It takes money to plan and execute these kinds of things, and oil money is whats keeping it going.
Americans are saving there money. Which is good. They are also spending alot of it on Amazon - which is a retailer. The fact that brick and mortar are failing is a consequence of increasingly easy online shopping.
The Chinese put WAY more strings on their aid packages - but they are different than our strings. But you know what - let them. They can take all of the US dollars they have stacked up in the past 30 years being our factory floor and use it to prop up the third world.
The same analysis goes for OPEC nations. None of them have a real incentive to back off, since I think its relatively easy to get those shale oil wells back and running again, I think. In other words, if they cut production, raise prices, they will lose market share as American wells come back online.
Americans maybe saving money but I wonder just how much and how many. I think the savings rate has increased after the great recession but then I saw an article a week or two ago where a survey from bankrate said 60% of couldn't handle an unexpected $500 dollar bill and I was a little surprised that the percentage was that high.
