Don't forget Russia. Cheap oil is hurting their economy badly with disfavor aimed at Putin growing.
OT: $30 barrel oil best thing for USA since Steve Jobs
- Thread starter GeorgeStreet
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Ideally, I think there's an equilibrium price you'd want to see. Not so high that it's adding a prohibitive "tax" to everything and not so low that it's a sign of weak demand and weak economy. What that actual price is, I couldn't tell you for sure but I think we're below it now because of all the pumping being done by the Saudis.
IMO the bigger contributor right now is the oversupply but there is definitely a contribution of weaker demand from China and other economies around the world. What we don't want to see is the US join the fray contributing to that weaker demand as well. Not sure how much above the fray we can stay if others around us are weak but I think we can be and probably will be ahead of the curve at least. So if the economy is doing well on a relative basis I think cheap oil is a good thing, you just don't want it to be a sign of upcoming weakness that's all I'm saying.
I've read both it's not so hard to get them back online and it takes some time. Not being an expert in that I have no idea which is true. What I think you could eventually see is that if some of these smaller players go under the larger companies will buy up their assets cheaply and keep some of it shuttered to prop up oil prices. The more players you have the more they all want to pump, reduce the competition and that desire may abate a bit.
And the really big issue here is if these prices aren't "artificially" low. The market assumes they are, but if this is just the price of oil now, we are in big trouble.
I'm very happy to see this here, which probably means we are finally starting to see an end.
But question over the next 10 years or so: Is oil the next coal?
But question over the next 10 years or so: Is oil the next coal?
Can macroeconomics experts please enlighten us with their knowledge? I find economists often think they understand the economy more than they actually do and as a result are always surprised at unexpected economic quarterly metrics.
Jamie Dimon remains confident that lower oil prices will benefit the U.S. consumer, citing exclusive data from the JPMorgan Chase Institute which shows that consumers are more comfortable spending the savings and at some point, the economy will reflect it. Even in the face of rising healthcare costs.
http://www.foxbusiness.com/features...-j-p-morgan-ceo-dimon-gives-his-forecast.html
http://www.foxbusiness.com/features...-j-p-morgan-ceo-dimon-gives-his-forecast.html
Won't be a problem when we finally decide to let them do their own thing in the middle east. No reason for the West to be there anymore. We should focus on solar & nuclear and electrically powered appliances and transportation. Trust me, Muslims want to kill each other as much as they want to kill Western people.
The Bolt won't be a game changer - or a "big step." In fact, it's a pretty awkward product - too little car for too much price, a slightly more attractive, more practical Nissan Leaf. 200 miles may look good compared to older EVs, but it's still way too low, before we even talk about the underdeveloped charging network, lengthy charging times - and bad timing, as per this thread. Even the debut was a yawn - it debuted at the Consumer Electronics Show and still managed to be one of the least interesting cars there. Pretty far down the list at the Detroit auto show, too.
Chevy can't even move the Volt, a more practical all-around car that's an established name and is now like $25K after rebate. How can you expect it to make big strides with a $30K all-electric Bolt?
Expect it to take 350+ miles or so, a more universal charging network, sub 10-minute charging times (without any of the ...80 percent full crap), and a more practical car with pricing semi-competitive with its gas equivalents before we even start daydreaming about a "game changer." Then we can wait for a whole market of similar cars before "mass adoption" is a term worth bringing up. Our best-selling car is still a pickup truck.
Plug-ins as a whole (which includes plug-in hybrids as well as EVs) made up less than 1 percent of 2015 US car deliveries, and 1 percent is considered good. If people were anywhere near as eager to embrace EV tech as you suggest, they'd have been eating up plug-in hybrids for at least the past two or three years. They offer a great alternative right now, giving you everyday electric driving, excellent fuel economy, no range anxiety, decent sticker prices, and a car you can drive straight across the country if you want. Yet we're not interested. I'd put that 15-year projection right back in the vault if I were you.
If you want a more interesting car that could be a stop on the way to a game changer, forget Chevy and look over the Atlantic at VW, most notably the Audi e-tron quattro. Just a concept, but it'll be launching in a couple years and VW has it at 310 miles. That's a range that'll start to turn heads, especially in a legitimately packaged AWD crossover. That's assuming the production car carries the number and design over, a big assumption considering what VW has on its plate now.
The "business news" of late is blaming low oil prices for the stock market decline. Don't believe it! Low oil prices help more businesses than it hurts. Especially small businesses. And it REALLY helps working class people, a gigantic swath of American society that includes everyone earning a wage, plus self employed, plus small businesses owners.
Compare the drop in your 401K or IRA's with the drop in the price of a gallon of gas and tell me if you would rather have the money you lost on your investments or the money you saved buying gasoline.
Walmart just announced the closing of 256 Walmart stores. They got hit by increased wages and a stronger dollar. You made a smart move.
Noboby was complaining in 1999 when oil was less than $30 barrel. I remember getting gas for 69 cents a gallon in March 1999. The executive elite will use their business television to spread their fear campaign. Cheap oil is great for everyone. Now maybe we can stop wtih this green energy nonsense.
Funny we just had a discussion about this at a dinner party last week. Dr. Ameer a good friend of my wife and a very knowledgeable guy posed that this was just economic warfare on Putin and Russia. As the Saudi's and US are not very happy with him and this was the easiest way to quell any power that he has. Just keep pumping more, flooding the market and driving prices down. Sure we'll hurt a little, but we'll be fine in the end. While they'll be ruined. The Russian people will blame Putin for his hard stance and he'll be out.
The WM closings are their small experimental "express" stores and stores in Brazil and a few stores in the USA that are obsolete and within 10 miles of another WM. In short, WM is being smart and will focus its growth efforts on online sales with free pickup at its stores. That's significant. The stock in a buy.
It's 115 stores in the US, but your right they say they will try to move current employees to other stores. We'll see if that's true or if they're just cutting back.
Where'd you find gas for 69 cents? Cheapest I remember is 89 cents around that time.
There was resistance in the 65 area so that's where I ended up selling it. It went up a little higher than that but it ended up being a lucky call to get out at that time. I was contemplating selling in the 63 area(where there was a little resistance) because of the market volatility but I took a chance that the strength it was showing might just last a bit longer. Fortunately it did. It was hit so hard last year and I classify myself as a "strategic knife catcher" so I figured some sort of bounce might be coming soon plus I had the comfort of a 3%+ dividend too if I needed to hold it longer (held it for about 2-3 mos). Really I was pretty surprised at the level of strength it showed early this year but after hitting that resistance it's succumbed as well like the rest of the market. I haven't bought it back yet though. I've been trading in even higher dividend paying and lower beta stocks like the telcoms and some consumer staples. They've been showing some relative strength as of late. Almost tempted to get back into some of the big oils again but have stayed away so far.
As to Walmart closing stores, yea they are but they're also opening 100 new supercenters this year as well. Most of these store closings look like they're in south/southwest and are probably under performing stores. They're trying to build out their online presence and while still small compared to the rest of the business that part of the business is showing some decent to good growth but still a long ways to go. I've read they could spin off Sam's Club too but I'm not sure if they will or not. I tend to think no but who knows.
I've thought it this could be one reason but not solely. I think it could be this in combination with Iran as well and also putting the hurt on U.S/Canadian shale/tar sands producers. So IMO it's a combination of things not just one thing alone.
WaWa on Rte 130 in Florence, NJ. they had just opened and it was 69 cents for regular!
I think there are factors beyond basic supply and demand at play here. While I don't think the OPEC cartel could influence the market as much as it has in the past given the increase in production from outside parties, there seems to be a geo political strategy that relies on the price of oil to inflict serious financial hardship on competitors and traditional enemies that may incent a country like Saudi Arabia to endure short-term losses to ensure a country like Iran will not be able to profitably sell oil once sanctions are relaxed. The US would have the same view with Russia. Now no one can withstand such losses for the long term and the Saudis of the own internal instabilities to deal with but again, they could restricting production if they chose to reduce supply but seem to have no interest in doing so. While I may be saving money at the pump, I am taking a more significant beating in my retirement accounts.
Occam's razor --- There is no grand geopolitical strategy or conspiracy. The movement of oil prices and the overall stock market behavior are substantially independent.
Well in 69 I remember filling my minibike for .32 cents per gallon. I used to get $.25 worth
Couple of things:
1). Im not seeing how exactly the US implemented this "hurt Putin" strategy in concert with the Saudis. Did our government meet covertly with oil execs and told them to drill/produce/pump or else? Since we obviously don't do the state owned thing. And it's not like the current government was making the permit process easy post-Macondo. Not to mention the time lag anyway. A cool story that doesn't pass the smell test for me.
2). Throwing out general "break even" prices is just not very helpful. Oil cos have markedly different capital structures. They have different cost bases and approaches to production. Formations themselves vary quite a bit in the cost to extract based on where you are in the formation. Service contracts are being canceled and renegotiated in this environment constantly. So even saying something like "Chevron is in trouble unless oil is above 45" is likely not accurate. You'd have to look at where they're operating and what those costs are there, and Chevron or whoever else isn't going to reveal that anyway to any detailed degree.
3). Certain posters keep speaking absolutes that oil prices being low is good "for everybody". Again not the people who work for oil companies (or who workED for them prior to being laid off) and not for companies that sold goods and services to both those employees and the oil cos themselves.
I get what you say but a CVX/XOM are diversified and getting their oil from all over. I don't know that you can say that for some of these new players where they're more levered to these newer methods for getting oil out of the ground. I don't really worry about CVX/XOM no matter where oil goes, they've weathered storms before and I expect they'll do so again. When oil is in a free fall like this I won't even really look at a Euro company like BP (I don't think the divy is as sacrosanct overseas as here) or a company like COP who has spun off their refining operations and I'm not sure about their divy either.
When oil is behaving "normal" or going up then I might venture out to companies like BP/COP/APC or what have you but when it's going down like this they're pretty much only 2 names I'll go to if I have interest in energy and that's XOM/CVX. I like that they're integrated and I think their dividends are solid (although some out there think they are in danger, I think they'd cut capex before the divy, specifically feel strongly about XOM myself). I'm not in them now but I'm getting tempted again and will be mentally prepared should a divy cut happen and I happen to be in them and will act accordingly.
There will be world chaos if the rest of world became very less dependent on oil. You think there is a Middle East exodus to Europe now? Pray oil goes up or Europe hasn't seen anything yet. And we'll also feel the wrath.
Now add the distorted sex ratios, in some areas 120:100 male/female births the past few decades, you have a recipe for diaster = pissed off males coming.
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Given very weak inflation and import prices that are dropping--to say nothing of job losses related and rattled markets relating to cheap oil--I'd say right now oil this cheap is not a good thing for America.
Which tells a little piece of the story. "80% of their gas savings" is, typically, a few dollars a week. It's not going to stimulate the economy in any measurable way.
Meanwhile, the big banks have billions of dollars worth of exposures in bad loans to the dozens of oil companies that have failed. Those failures have led to - so far - tens of thousands of job losses.
You're arguing a point that is both economically uninformed and easily disputed.
I'm not arguing the point. The CEO of JPM/Chase is. He wasn't concerned about it at all. Also said the US can survive anything that is going in in China.
And you are a little disingenuous when you say "a few dollars". Its billions. Transportation is a huge part of the economy.
You've really gone over to the dark side, lately, from an intellectual perspective.
First of all, the CEO of JPM/Chase is Jamie Dimon. About whom there was an extensive article written just a couple of days ago in which he bemoaned the banks' exposures to weakening industry loans and said that accounting rules which prevented the banks from setting aside additional contingency funds to cover those loan failures would lead to the loss of billions of dollars in the industry. The only positive thing that Dimon has said recently is that "this won't be as bad as '07-'08", but he has been absolutely forthcoming about a major downward shift in the global economy.
So the possibilities here are A) you misunderstood what he was saying, B) he wasn't asked the right questions of C) you're misrepresenting what you heard.
As far as your statement on fuel savings - U.S. gasoline sales are, on average, about 25 million gallons a day. The average price of a gallon of gasoline has, in the last 12 months, gone from $2.77 per gallon to $1.88 per gallon. That's a TOTAL consumer savings of $22 million per day. $803 million in one year.
So no, it's not "BILLIONS" and no, those savings are NOT offset by the damage done to the U.S. economy, top to bottom. The roughly 10,000 job losses in the last few months, alone, are about the same as the total savings in consumer fuel costs in the last year.
This issue isn't terribly complicated. It's mostly math. You're on the wrong side. Let it go.
Scary post, in a time when it's never been easier for people, ideology and weapons to move around the globe. Hadn't thought of this.
No. Ill stick with the 15 years. 15 years ago was about when the Prius hit the US market. As they say - in logarithmic terms, 1% is halfway.
