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Old 10-18-2014, 05:26 AM   #1
Feenix
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Default Global Oil Crisis

What are everyone's thoughts on the dropping price of oil? I have friends and co-workers that are on the verge of a nervous breakdown because the price of oil in Alberta, Canada dropped below $80 a barrel the other day. Are we in for another global recession? Can the price of oil bounce back even with countries like Saudi Arabia and Kuwait pledging to continue to produce the same amount of oil?

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Old 10-18-2014, 07:17 AM   #2
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Default Re: Global Oil Crisis

Im enjoying being able to fill my tank up for less than $40. Gas prices are back in the $2.90 range in my area.

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Old 10-18-2014, 10:08 AM   #3
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Default Re: Global Oil Crisis

How is cheaper oil a crisis?

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Old 10-18-2014, 02:08 PM   #4
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Default Re: Global Oil Crisis

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How is cheaper oil a crisis?
For countries like Canada and the US that produce oil, dropping oil prices would slow down the economy. A slow economy doesn't attract investors and people working in the oil industry could see their jobs disappear. Yes, people will save money on gas and pump that money back into the economy elsewhere, but the hit the economy could take with a decrease in the exportation of oil would outweigh this. Other smaller countries would see a benefit with dropping oil prices, but North America and other major players would end up suffering. It can have drastic consequences in the long run that may see another global recession.

http://m.theglobeandmail.com/news/wo...service=mobile
http://m.theglobeandmail.com/report-...service=mobile
http://www.economist.com/news/financ...d-economy-both

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Old 10-18-2014, 03:41 PM   #5
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Default Re: Global Oil Crisis

I know this is easier said than done, but its beyond time for this country to move away from big oil. Our economy shouldnt be so dependent on the price of a barrel that its value dropping can destabalize the whole world's economy. To allow one commodity to so greatly effect the world's economy seems incredibly foolish. Its like we never learn.

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Old 10-18-2014, 04:28 PM   #6
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Default Re: Global Oil Crisis

Yet, gas is only one thing that is from petroleum.

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Old 10-18-2014, 04:57 PM   #7
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Default Re: Global Oil Crisis

Cheap fuel is overwhelmingly an economic boon. Look beyond your net exports to the downward pressure on costs for SME's and a general fillip to your trading partners (many of whom are enduring sclerotic growth).

In any case, I believe that fuel will continue to get cheaper in the medium term, as more net importers of fuel explore shale and invest in more nuclear power. This will be encouraged by the need to ameliorate Russia's geopolitical clout as an exporter, as well as to provide stimuli to growth.

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Old 10-18-2014, 10:29 PM   #8
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Default Re: Global Oil Crisis

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Yet, gas is only one thing that is from petroleum.
True but I still thinks its foolish to rely on any one thing to such a degree. It sets us up for problems.

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Old 10-18-2014, 10:38 PM   #9
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Default Re: Global Oil Crisis

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How is cheaper oil a crisis?
Oil is one of the pillars in the shaky house of cards that is the global economy. As much as I'd love it if hydrogen or some other alternate fuel source magically became the only source of energy needed, if that happened the global economy would completely collapse. Not to mention the fact that a lot of tenuous and fragile geopolitical relations are built on production, supply and sale of oil.

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Old 10-19-2014, 12:05 AM   #10
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Oil is one of the pillars in the shaky house of cards that is the global economy. As much as I'd love it if hydrogen or some other alternate fuel source magically became the only source of energy needed, if that happened the global economy would completely collapse. Not to mention the fact that a lot of tenuous and fragile geopolitical relations are built on production, supply and sale of oil.
Just think of how many less wars the US can get involved in when they don't have to worry about Oil. All that cash saved from not going to war can be invested elsewhere

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Old 10-19-2014, 12:22 AM   #11
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Default Re: Global Oil Crisis

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Just think of how many less wars the US can get involved in when they don't have to worry about Oil. All that cash saved from not going to war can be invested elsewhere
That's one sliver of the story, and only benefits Americans, and I'm skeptical about even that part.

The paradox here is that the oil companies need to keep going strong in order for money to keep being plowed back into the financial system and to keep cash circulation strongish (among numerous other industries). But with the plethora of factors affecting oil production and price, not least of which is the decreasing supply, you have an increased price (lately) which benefits the companies but completely shafts the consumers. It's very much in the consumer's best interest for the price to be low, because the higher the price goes the more they're paying not only for fuel but also for other products because distributors pass their increased transportation costs (i.e the rising fuel) onto the consumers as well.

Combine the complex economics, which I did a very bad and simplistic job of explaining, with the various political motivations that exist for oil-using countries to stay on good terms with oil-producing countries and you have a volatile melting pot of economic and political variables that need to not be disturbed lest the already delicate economy be turned into an even more comprehensive cluster****. Cheap petrochemical products are bad. Expensive petrochemical products are bad. Petrochemical products are bad.

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Old 10-19-2014, 12:36 AM   #12
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That's one sliver of the story, and only benefits Americans, and I'm skeptical about even that part.

The paradox here is that the oil companies need to keep going strong in order for money to keep being plowed back into the financial system and to keep cash circulation strongish (among numerous other industries). But with the plethora of factors affecting oil production and price, not least of which is the decreasing supply, you have an increased price (lately) which benefits the companies but completely shafts the consumers. It's very much in the consumer's best interest for the price to be low, because the higher the price goes the more they're paying not only for fuel but also for other products because distributors pass their increased transportation costs (i.e the rising fuel) onto the consumers as well.

Combine the complex economics, which I did a very bad and simplistic job of explaining, with the various political motivations that exist for oil-using countries to stay on good terms with oil-producing countries and you have a volatile melting pot of economic and political variables that need to not be disturbed lest the already delicate economy be turned into an even more comprehensive cluster****. Cheap petrochemical products are bad. Expensive petrochemical products are bad. Petrochemical products are bad.
At some point this world needs to move on from Oil as an energy form. Not even taking environmental concerns into consideration Oil is a rather archaic form of energy and if people just put enough time and resources into finding better methods to create energy it shouldn't be to hard. Way I look at Oil, is in a modern day cell phone world, Oil is the rotary dial phone(sure it works, but probably not the best way to communicate with people with today's technology advancements).

All that being said as long as their is a lot of money tied up in Oil, they will not give up being the dominate energy provider. Personally if I was a country and wanted to take down the US, I would spend all my money on finding better ways to create energy


Last edited by SV Fan; 10-19-2014 at 12:40 AM.
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Old 10-19-2014, 03:07 AM   #13
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Default Re: Global Oil Crisis

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Just think of how many less wars the US can get involved in when they don't have to worry about Oil. All that cash saved from not going to war can be invested elsewhere

Hmmmm....I wouldn't necessarily blame that on oil.

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Old 10-19-2014, 11:15 AM   #14
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Default Re: Global Oil Crisis

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At some point this world needs to move on from Oil as an energy form. Not even taking environmental concerns into consideration Oil is a rather archaic form of energy and if people just put enough time and resources into finding better methods to create energy it shouldn't be to hard.

That's not true at all. If finding alternative energy was easy then it would already have been done. Why because it would be PROFITABLE more profitable than oil which takes a lot of money to find and get out of the ground.

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Old 10-19-2014, 11:18 AM   #15
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Default Re: Global Oil Crisis

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Just think of how many less wars the US can get involved in when they don't have to worry about Oil. All that cash saved from not going to war can be invested elsewhere
Too true. It'll free up money to go to war for other reasons.

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Old 10-19-2014, 11:22 AM   #16
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Default Re: Global Oil Crisis

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Originally Posted by SV Fan View Post
At some point this world needs to move on from Oil as an energy form. Not even taking environmental concerns into consideration Oil is a rather archaic form of energy and if people just put enough time and resources into finding better methods to create energy it shouldn't be to hard. Way I look at Oil, is in a modern day cell phone world, Oil is the rotary dial phone(sure it works, but probably not the best way to communicate with people with today's technology advancements).

All that being said as long as their is a lot of money tied up in Oil, they will not give up being the dominate energy provider. Personally if I was a country and wanted to take down the US, I would spend all my money on finding better ways to create energy
Yeah we do, I agree with you. The problem with it is that the transition needs to be gradual because of how sensitive economic reactions are to even the slightest fluctuation in a commodity's price. Some auto manufacturers are trying to shift some of their resources into alternative energy cars, but I think people underestimate how entrenched the support for oil is.

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That's not true at all. If finding alternative energy was easy then it would already have been done. Why because it would be PROFITABLE more profitable than oil which takes a lot of money to find and get out of the ground.
People have found it, and advances keep being made in terms of making things like hydrogen engines more affordable and durable. The problem is unseating big oil. Just look at biofuel, there are guys building biofuel engines in their barns, there are Lithium battery electric cars, hydrogen engines are becoming cheaper and cheaper. It's out there but no business has the balls to invest in it on a wide scale and try to compete with fossil fuel.

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Old 10-19-2014, 01:59 PM   #17
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Default Re: Global Oil Crisis

Let's be optimistic: fusion power may be only a decade away.

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Old 10-19-2014, 02:17 PM   #18
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Default Re: Global Oil Crisis

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Let's be optimistic: fusion power may be only a decade away.

Hey, they have it on Sim City.

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Old 10-19-2014, 03:25 PM   #19
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Default Re: Global Oil Crisis

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Cheap fuel is overwhelmingly an economic boon. Look beyond your net exports to the downward pressure on costs for SME's and a general fillip to your trading partners (many of whom are enduring sclerotic growth).

In any case, I believe that fuel will continue to get cheaper in the medium term, as more net importers of fuel explore shale and invest in more nuclear power. This will be encouraged by the need to ameliorate Russia's geopolitical clout as an exporter, as well as to provide stimuli to growth.
Ding Ding Ding. You are correct.

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Old 10-19-2014, 04:18 PM   #20
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Default Re: Global Oil Crisis

This was bound to happen, it was predicted months ago that this was going to happen. How is anyone surprised by this?

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Old 10-19-2014, 06:37 PM   #21
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People have found it, and advances keep being made in terms of making things like hydrogen engines more affordable and durable. The problem is unseating big oil. Just look at biofuel, there are guys building biofuel engines in their barns, there are Lithium battery electric cars, hydrogen engines are becoming cheaper and cheaper. It's out there but no business has the balls to invest in it on a wide scale and try to compete with fossil fuel.
I may be jaded but (I feel) the Big Government Regulating hating Republicans and Environment Friendly but Wall Street Friendlier Democrats seem to have no problem over regulating other energy industries making it hard for any start up companies to take off.

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Old 10-19-2014, 09:22 PM   #22
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Default Re: Global Oil Crisis

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This was bound to happen, it was predicted months ago that this was going to happen. How is anyone surprised by this?

No one in Houston is surprised by this. I spent a day listening to experts on the economy of Houston back in July, and this was the talk of the town.

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Old 10-30-2014, 02:02 PM   #23
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Default Re: Global Oil Crisis

Well the gas station I go to is at $2.97. It hasn't been that low in a long time.

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Old 10-30-2014, 04:13 PM   #24
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Default Re: Global Oil Crisis

Good. Think how much that will save businesses, allowing them to invest more, cut their prices, and give their employees a Christmas bonus.

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Old 10-30-2014, 04:55 PM   #25
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This time last year it used to be around $3.80 at the one I always go to. Evey time I pass by it now, it is always filled with cars. I actually had to wait in line for the first time. Never did I have to wait at this small gas station. I learned my lesson. Now I wont go until 9 at night if I need gas.

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