How $50 Oil Changes Almost Everything

[Purveyor]

By Isaac Arnsdorf and Simon Kennedy Jan 7, 2015 7:30 AM ET

The plummeting price of oil means no more trout ice cream.

Coromoto, a parlor in Merida, Venezuela, famous for its 900 flavors, closed during its busiest season in November because of a milk shortage caused by the country’s 64 percent inflation rate, the world’s fastest.

That’s the plight of an oil-producing nation. At the same time, consuming countries like the U.S. are taking advantage. Trucks, which burn more gasoline, outsold cars in December by the most since 2005, according to data from Ward’s Automotive Group.

The biggest collapse in energy prices since the 2008 global recession is shifting wealth and power from autocratic petro-states to industrialized consumers, which could make the world safer, according to a Berenberg Bank AG report. Surging U.S. shale supply, weakening Asian and European demand and a stronger dollar are pushing oil past threshold after threshold to a five-and-half-year low, with a dip below $40 a barrel “not out of the question,” said Rob Haworth, a Seattle-based senior investment strategist at U.S. Bank Wealth Management, which oversees about $120 billion.

“Oil prices are the big story for 2015,” said Kenneth Rogoff, a Harvard University economics professor. “They are a once-in-a-generation shock and will have huge reverberations.”

more...

http://www.bloomberg.com/news/2015-01-07/oil-at-40-means-boon-for-some-no-ice-cream-for-others.html

[Jackpine Radical]

1. Usually when someone around here starts a sentence with "Who could have imagined…"

you can pretty well assume they're making at least a glancing ironic reference to Condi's infamous post-9-11 comment.

Not on this post, though.

Really--Who could have imagined a year or 2 ago that the next big global economic shock wave would be triggered by an unprecedented DROP in oil prices?

[davidsilver]

2. I feel sorry for Coromoto but...

happy for the American working class, of which I am a proud member, who are finally getting some financial relief from these low gas prices. I make a modest income of which expenditures for petrol had previously made up an ugly bite. I am not serviced by mass transit where I live and am dependent on my older model Subaru to get to and from my job.

Gas prices are one of those things that really don't impact the rich and the well off the way they effect me.

[JayhawkSD]

7. Not so good for workers in the oil industry.

Or the hundreds of industries which supply it. Like the 730 workers laid off by US Steel because of the reduced demand for steel pipe. And the railroad workers and truckers who transported that pipe to the oil fields. They are not reaping the benefits of all that extra spending money, and are not running out and buying gas guzzling trucks and SUVs.

But I guess they are not part of the "working cllass" so we don't need to be unhappy for them.

[davidsilver]

9. Contrary...

There have never been more jobs in the oil industry domestically as well as the untold mass of new jobs in direct support or or relation to the oil boom. The 730 at US Steel were not laid off due to dropping oil prices and as to truckers and railroad workers, they have never had as much goods to haul than they ever have.

Low oil prices are good for working Americans like me and the millions of others in the working class.

[davidsilver]

10. Also,

The 730 jobs cut by US Steel happened last Summer. They were undercut in the pipe department by overseas competition and not low gas prices in January 2015.

Check the article out;

http://triblive.com/mobile/6240704-96/steel-imports-pipe

Get your facts straight next time!

[JayhawkSD]

11. Ah, yes, the belief in unicorns persists, #9 and #10

Prices drop to half, and no jobs are lost, no wages are cut, no layoffs are made. The corporations keep hiring and filling jobs at high wages even though revenue has fallen to 50% of what it was. They will not reduce their payrolls at all, because they are not concerned with profit at all, they care only about the well being of their employees.

[Frustratedlady]

3. I'm waiting for the drop in oil prices to trickle down to

the cost of groceries.

Will the manufacturers also go back to the normal sizes of cans, boxes and bottles? They can't get much smaller.

[SoLeftIAmRight]

4. I see it as a setback to changes that we must make.

We should have pushed President Carter's energy agenda with vigor. Conservation, solar, and exploration.

[sabrina 1]

5. I agree. Even though it benefits us temporarily, the high prices forced people to

try to find alternative energy sources.

[bananas]

8. Carter was also going to use shale to avoid war in the middle east.

We would have been much further along with solar, and avoided two wars in the gulf.

[Moostache]

6. Everyone PLEASE remember...this drop in prices is TEMPORARY!!!!

The immutable fact is oil is NOT a renewable resource. The advances in drilling and extraction are not the same as exponential growth in computer processing (ie. - they will NOT be doubling every 18 months!).

The other shoe will drop and for people who do not wisely use this drop in gas and oil prices to insulate themselves against that - specifically by buying the more fuel efficient and alternative powered hybrids and electric - NOW, the end result will be more painful than it has to be.

PLEASE....stress to people that just because the price is down now, buying a gas-guzzling truck or SUV is still a really bad idea, worse now that it appears affordable.