Oil & The Economy

[Terrel L. Shields]

The oil trading pits are in turmoil. One side believes that tightening oil supplies means oil prices should rise. But the other side believes that the economy is weakening which always impacts oil consumption. And what the Fed does can signal a push one way or the other. If lowering rates 0.25 the market expects that. Anymore and the signal is that the economy is weakening faster than desired, and a hard landing is coming. No change would panic the markets. Meanwhile, more people are shorting the oil price than predicting it to go higher. OTOH, geopolitical rise is at play. More war, less supply. Russian production is hurt by Ukraine. And any recovery in the economy of Asia and the world will signal higher prices.

I am not a good prognosticator of oil but I think we will see a lot more volatility in prices with it trading in the 70s with spikes down into the low 60s or even 50s and sudden reversals the norm with prices striking well into the 80s or even touching $90s. Gonna be a wild ride this fall and winter.

 

[Terrel L. Shields]

Once again, the change in oil prices has been on a roller - coaster. From mid- $65 a couple weeks ago, we are back over $75 - Brent is over $80. Gasoline price OTOH are relatively low. That is in part due to the lack of demand for the summer blend. People are pulling in their expenses. The price reflects Middle East turmoil. And that means Iran could see their oil terminals struck just as Ukraine is hitting refineries. Russia's big oil buyer - India- is also urging Putin to end the war. Economics may decide this war. Iran-Israel conflict is more problematic.

 

[Zoe]

I did get gas at Sam's a day or two ago for $2.42.9 a gallon. I think that is the lowest I have paid in a long time. Sam's is just about always the lowest in Shelby County.

 

[Terrel L. Shields]

Yes, and we were paying a lot more in 2013 and 2014 largely due to having to buy a lot more from overseas. It is our domestic efforts that have kept prices low, but international prices are controlled by OPEC+ and geopolitical events. With the Mideast getting "hot", prices went up but fell back today because of demand. And what does lower demand mean? It means people cannot afford to drive excessively. It means truckers are not as busy. It means the economy continues to slow down. So, we are always on this knife edge of supply and demand and watching a tug of war between the geopolitics of Russian-Ukraine and Israel-Iran. The big buyers (China, India) are playing the Russians and Venezuelans against each other to keep prices down there. Venezuela is broke and cannot even help Cuba who is really broke. Russia cannot help either Venezuela nor Cuba so China is stepping in trying to secure cheap oil for themselves. Meanwhile, we make every effort to destroy the oil industry under the fantasy that this will stop the imaginary "global climate change" that isn't happening..or is happening so slow it will not impact the economy significantly. Colorado aka California-lite, is trying to pass legislation to ban all drilling for oil and gas. When they do (and eventually they will) the mineral owners will sue for the value of these mineral rights as a "taking" by the state. Which will possibly behold the state to several TRILLION dollars in damages. I would love to see mineral owners take the property of the state including there state buildings, cars, and surface properties to pay it off.

 

[Fernando]

Oil prices went back down today. The fear of oil attacks in Iran has lessen for now.

 

[Terrel L. Shields]

Oil prices went back down today. The fear of oil attacks in Iran has lessen for now.

that's what I said, but like my OP, oil prices will be very volatile and is a war between the fear of an ever larger war in the Middle East and the economy weakening. If the economy strengthens then oil prices will hit $100 in no time.

 

[Zoe]

Oil prices went back down today. The fear of oil attacks in Iran has lessen for now.

Yeah, no need to attack that. Israel likely won't do that. Israel still lives by an eye for an eye and a tooth for a tooth mindset. They will hit something. I hope it is not oil or nuclear.

You can't send that many rockets into Israel and not expect a response. That is dumb.

 

[Fernando]

Stock markets are doing so well. Our economy is going in right direction heading to November 5.

 

[Terrel L. Shields]

stock markets are doing so well. Our economy

There is no relationship between the stock market and the ordinary person's "economy"... none whatsoever. Few have stocks and if they do, its in a 401k or other group investment vehicle. Jamie Dimon and Silicon Valley makes not one whit of difference in the everyday lives of the average working stiff in America.

 

[Fernando]

There is no relationship between the stock market and the ordinary person's "economy"... none whatsoever. Few have stocks and if they do, its in a 401k or other group investment vehicle. Jamie Dimon and Silicon Valley makes not one whit of difference in the everyday lives of the average working stiff in America.

Trickle down economy. When the rich do well, the economy does well.
You forget about 2008. When Stocks crashed and Big Companies got hit, the ordinary person's economy got slammed.
I still remember December 2008. Christmas lights and decorations were not out as much. Cheerless Christmas.