Can some one explain this to me

old · Dec 18, 2008

On the news last night they where saying that if gas prices stay low like they are now. Around $1.50 a gal. that is is going to hurt the economy so hows is that. Only thing I know/see is if it stay low that means the guy that drives 50 mile round trip to work and has a 25MPG car saves a lot of money so he can then spend it on other things so how is the lower gas prices hurting any thing

RobMD · Dec 18, 2008

who knows what hurts what anymore. Oil at 147/barrel 6 months ago, now down to 40/barrel. Dow down 4000 points, consumers going nuts. Homeowners now own cardboard boxes, and I get off scot-free since i'm in my 5th year of college.

Well, not necessarily scot-free, because some retarded people 20 or so years older than me messed up my job outlook. Plus, my father gets to have fun being laid off soon, along with many other friend's fathers.

Life's a b*tch, but I'm not gonna let it bark back at me.

sasedivy · Dec 18, 2008

so how is the lower gas prices hurting any thing

Read an article awhile back that was talking about how low fuel prices in the USA [size=9:fd21fd3579](while good for Joe six pack)[/size:fd21fd3579] has a negative effect on foreign investors which in turn hurts the US market as well...

[size=9:fd21fd3579]Scott[/size:fd21fd3579]

Anonymous-0 · Dec 18, 2008

Could be dependant on what they invested in.
IE. with gas being cheaper, Joe Sixpack can spend more on beer which would be a good deal for anyone that invested in brewerys......

Spook · Dec 18, 2008

I think the lower oil prices are gonna help the economy in the short run, donno about long term. But it is gonna hurt the ethanol folks, unless external_link really stokes up incentives for ethanol. Ironic, most farmers didn't vote for him, he might turn out to be the best president they ever had!!!

Kevin in OK · Dec 18, 2008

Don't know the official word, but last I checked here in Oklahoma, as oil prices drop, the local economy drops as well. For a long time the news had been talking about how Oklahoma was recession resistant, or recession proof, but as oil prices fall the big energy companies here are starting to feel the hurt. If I recall correctly, the companies said they would be alright and things would stay largely the same at about $45 a barrel, but as it dropped to $40 and closer to 35, layoffs would begin to occur.

Kevin

Anonymous-0 · Dec 18, 2008

Hopefully, the OPEC Countries will soon be starving.. We showed them that they cannot rule the world.. I will admit, though, that the High oil prices were the last straw that triggered the reccession..

sasedivy · Dec 18, 2008

Could be dependant on what they invested in.

You bet!

But as 'Kevin in OK' said, lower prices also mean lower profit which can translate into lower wages...

Same with foreign oil, lower prices, less money to play with in the US market...

Our brothers to the north send a lot of crude this way!

S.Crum · Dec 19, 2008

I had this same conversation with my son just this morning. He's in his 2nd year of college and is pretty much clueless as to what he wants to do when he grows up. He tells me I need to learn to relax. I didn't take advantage of the college opportunity and opted to go into the workforce. I've always had a decent job but I have relative to the fact that I've always muscled up to the task and made the man a profit. Learn and know what you gotta' do and get it done. I've insisted that my kids attend college so they don't have to do the hours I've had to but you know what? the tables are turning. The bottom line in any business is more money must be made than spent and the guy with experience and having paid his dues is suddenly more valuable than the one who is educated, requires more compensation due to the education, expects to have banker's hours and isn't real enamoured with diving in a slop hole the make a down pump work.
We as a country of the 'information age' are well ahead of our time. I just don't find information all that tasty.

Kansas Cockshutt · Dec 19, 2008

Hmmmm

Old, remember the old saying it may apply here:

If Riverboats were a nickel, all I can do is run up and down the bank yelling "Look how cheap them boats are".

Translation: Things are coming undone and if you don't have the confidence, cash, or both it don't matter how cheap gas gets...

Anonymous-0 · Dec 19, 2008

My dad used to say about the "good ole days" $.15 gas is too much if you can't get $.15!

greygoat · Dec 19, 2008

Lower prices mean less State and Federal tax"s
collected. Perhaps less sales tax collected also ?

Mike M · Dec 19, 2008

The high oil prices had our local Ohio oil fields gearing up drilling wells,fixing old wells,makeing specilized rigs. Now they are laying people off.

Anonymous-0 · Dec 19, 2008

state and fed taxes on fuel is by the gal. not by the doller so the more gals. you buy the more tax the less gals. you buy the less tax

trucker40 · Dec 19, 2008

Just one more sign that you cant believe the corporate news media.150 a barrel oil killed the economy,now they are crying because its too low?This has to be the lyingest bunch ever.Next they will want the government to bail them out,and all the states with oil in them will be crying for more subsidy to drill.We need to build a big electric chain link 15 ft high fence around Wyoming or someplace and put all of the crooks in there and if they,get 10 ft from the fence shoot them.No food no water,nothing,and all they have is each other to screw over.If any of them survive after a year put them in prison in Guantonimo.

Jrry · Dec 19, 2008

Old, you are right on. As someone else said on the forum the best way to cure the recession is to quit listening to the news.

1936 · Dec 19, 2008

In a word Deflation. Causes people to lose more jobs than inflation. Now on the other hand it cost about 40 dollars less to fill up at the present time so that money can be used for food, clothing, and shelder. One thing China is feeling our money problems by the stats I have read. At last. As for the big 3 the lower gas come about 6 months toooo late! Bush must have watched United airlines use the laws aforded by out county to go through Chapter 11. They down loaded massive expenses alowed by the courts. The pensioniers took a hit along with workers.

rrlund · Dec 19, 2008

Don't know Rich. I read everything everybody else said. All I know is it sure isn't hurting me. Cattle prices are down,but inputs are down even more. I honestly didn't know how I was going to farm another year the way things were going,but it's looking like I'll be writing a whole lot smaller checks in the spring.

Same goes for heating the house. Thought I was going to have to cut wood. It would have taken a fat steer a month to heat this place the way it was looking. Now fuel is lower than it was 2 years ago.

northener · Dec 19, 2008

Just heard Canada has 100 year supply of oil in capped wells just waiting. We are gonna sell oil to the USA and then take the profits and buy our country back from them.By that time USA will have a population that beleives in drilling for oil in the USA.All the tree huggers will have died off.

Dick L · Dec 19, 2008

I sure would not think that a low gas price would hurt the economy but low usage will. I have already read that the States and feds are talking of raising the gas tax because of lose of funds to repair roads. I have heard the tax increase would be between .50 and 1.00.

That would be like a fat tax on some foods. They will get used to the money and then if the tax would stop people from buying those products the funds would decrease and they would want to increase that tax to keep paying the new program.

Anonymous-0 · Dec 19, 2008

It's called double talk or double speak the politicians use it all too well as does the media. They don't work for us anymore they are paid by big oil and corporations to brain wash you with what they say. They are like double forked tounge snakes! Believe it and don't think rationaly for yourself is what they want. Low fuel prices only hurt the rich they don't have enough money now to keep putting you under their thumb but we know that's now true they gouged everyone till broke may not be much more they can gouge for. Nothing but greed of the rich fast money is the root to all evil !

Mike (WA) · Dec 19, 2008

You got me, Rich, I have to agree with you. The only stateside folks hurt by low oil prices are the Exxon-Mobils of the world, and one would hope they banked a little of the ELEVEN BILLION DOLLARS PROFIT PER QUARTER they were making recently, to tide them over. I think what's concerning is the lowered demand, even in the face of big supply cuts by OPEC, is an indicator for the rest of the economy, and it ain't good. It's indicating deflation.

onefarmer · Dec 19, 2008

The whiners have to whine about something. Last year it was the high price of oil. Now they can blame the low price.

Lou · Dec 19, 2008

Opec is starting to cut production so the price will start to rise. We should be developing alternate energy sources , we are going to need them.

IndianaRed · Dec 19, 2008

So getting more of our own oil won't help? To me it seems as though people who want to pass "Green" legislation are the ones pushing for alternatives.

WantACaseLASomeday · Dec 19, 2008

The media, which does the bidding of the dimocrats, wants you to believe that. They will keep saying it until folks think it is true.

Dimocrats want high high high fuel prices because they need to force folks like us to have our backs agsinst the wall so they can ride in on gooberment horses and "save" us and make us dependent on them It is all about their power. That's why the magic nnalert will propose a new gas tax of several dollars. Dimocrats want common peole to hurt - they always have and they always will.

MarkB_MI · Dec 19, 2008

In economics, nothing exists in a vacuum. And there are unintended consequences to every action.

High fuel prices, although they hurt most segments of the economy, are a necessary condition for domestic oil exploration. No oil company will drill for domestic oil when they can buy Saudi Light Crude for less than 50 bucks a barrel. Ask anyone who works in the petroleum industry what they think of 50 dollar crude oil. Thousands of people who work in oil exploration will be looking for jobs if prices stay low. I'm talking about folks working for the drilling companies, land agents, geologists, wireline services, oilfield services and drilling equipment manufacturers, just to name a few.

Cheap oil also means cheap transportation costs for imported goods that compete with our domestic products.

Cheap oil discourages conservation, mass transportation and investment in alternative energy sources.

I don't like to pay upwards of four bucks a gallon for gas more than anyone else. But we will get whipsawed by the current instability in prices. How is any company supposed to make long-term plans when future fuel prices are up in the air? Somewhat higher crude oil prices will increase both foreign and domestic production, which should bring long-term price stability.

chvet73 · Dec 19, 2008

OPEC will not cut production. We may be addicted to oil but they are addicted to dollars. They can not afford to have less income then they have now.
Each of those countries are so greedy they expect the other one to make the cut. Then none of them do. In order to get the price up they will have to cut far more than they say. It will not happen.
Check out the history of them cutting production, they always say that they are going to cut and never do.
In order to support the sheiks extravagant life style they need our dollars.
Until our economy improves the demand is not going to go up much. When demand goes up so will the price.

Anonymous-0 · Jan 26, 2009

Wherever low, medium, or high gas prices and the recession lead us... it's all functioning for the best isn't it? ; ]
Just like the stock market, and the housing foreclosures, commercial lender paralysis...it's all fulfilling Reagan, Greenspan's, and Milton Friedman's genius Pledge of The Market Allegiance: "We pledged allegiance to the...and to the nnalert for which it waves, one Market under God..with misery and bailouts for all."

Clarkbug · Jan 26, 2009

I think one of the biggest issues with the whole OPEC thing is that the oil prices per barrel are no longer really attached to the supply available. The price was up so high last year due to the investors pushing the price up there. There wasnt any shortages or breakage in refineries. It simply was pushed that high because people wanted to invest in it.

Now that its in the tank, there is talk about reducing the supply and trying to bring it back up, but Wall Street somehow is in control of what the price per barrel is, and that translates to what the prices are at the pumps.

I think that sort of trading should just stop, it sure would help the stability of the market.

Can some one explain this to me

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