So much for the gloom ’n’ doom of oil at $200 or $300 per barrel that we were hearing just a few months ago. O’ course, oil at $50 per barrel is also being cast in terms of gloom ’n’ doom... The bad thing, of course, is that low oil prices are a sign of gloom ’n’ doom: they are falling because it’s predicted that the world economy is headed into recession / depression and people will not need or be able to buy oil as they have for the past several years (collectively known as The Worst Economy Since the Great Depression (TM)). The good thing is that lower oil prices are good for the consumer and should cushion the blow of the economic downturn (to be known after Jan 20 as The Golden Age of Obama (TM)).
The fall in oil prices SHOULD also prove wrong those who think that the high prices we saw earlier this year were solely the result of gouging by greedy oil companies: if the oil companies raised prices so high at will, why would they be lowering them now? Don’t they want to keep filling their already swollen moneybags? Don’t they want to continue to pay their executives huge salaries? Or could it be that the oil companies, like any other business, are subject to the laws of supply and demand? Could it be that they were making "obscene profits" NOT because they were gouging but rather because they are huge businesses selling huge amounts of a needed commodity?
What goes up must come down. Seems to be as good a rule in economics as in nature. |
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Written By:
docjim505
URL:
http://
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Thank goodness the stupid idea of opening up the Strategic Petroleum Reserve just to control price was shot down. If they had used it, the socialist chorus would be crowing about how government intervention worked so perfectly. They would never have admitted it possible that the price came down just due to market forces. |
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Written By:
Billy Hollis
URL:
http://qando.net
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Oil prices are historically cyclical.
The big revenues from high prices are quite addictive for single commodity economies, so there’s always this urge to produce more as the price falls. |
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Written By:
Martin McPhillips
URL:
http://newpaltzjournal.com
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Does anyone recall all the flack I took for saying we’d be at this level again within 6 months?
(Chuckle)
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Written By:
Bithead
URL:
http://bitsblog.florack.us
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