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Page added on January 14, 2016
The Odd Consequences of the Oil Price Crash
In the middle of 2014, oil traded for more than $100 a barrel. Today, it is below $35. Traditionally, there would be numerous positives from low oil prices, but many of these have yet to materialize or may no longer be relevant at all. The U.S. shale boom, one of the great American growth stories, appears to be rolling over, and the jobs are drying up. China, as it is with the vast majority of commodities, is both a dominant force behind growth, and a significant participant in its decline. And for the traditional energy power brokers in the Middle East, the harsh reality of low oil has already begun to destabilize the region.
The U.S. economy was expected to benefit from lower oil prices, but in terms of consumption growth, the effects have been minimal. Instead, it appears consumers have used the savings to pay down debt. Undoubtedly, this is positive and necessary, but it fails to show up in present growth rates. Deleveraging bodes well for future growth, but does little to thrust the present economy forward. This, of course, is a bit of a headache for the Fed—low interest rates are supposed to pull spending forward. Debt was, and remains, cheap. But instead of bingeing on cheap debt—and magnifying the effects with cheap oil—the consumer has turned the other way. This is one of the less publicized and most confounding oddities in the aftermath of the financial crisis.
Households have yet to believe that oil will remain low. Because of the rhetoric predicting a recovery in the price from the current $35 level—and the recent volatility of the price, it may take longer for households to alter their consumption habits, if they ever do.
In fact, the U.S. economy does not appear to have the same relationship it once had with high oil prices. Not long ago, higher oil prices threatened to cut economic expansions short. Now, the opposite has occurred in the United States, as low oil capital expenditures and a strong dollar have sent the industrial economy into a recession. The United States is a pseudo-petrostate, and, as oil patch capital expenditures have fallen, the job losses have quickened. Granted, the overall jobs picture is quite sanguine, and the losses in the oil patch are a mere blemish. Companies have reacted far more quickly than households and slashed payrolls accordingly. It could get worse, but the U.S. economy has experienced much of the pain from oil’s downside. This leaves the American economy in an intriguing spot, in that a moderate rise in the price of oil may strengthen, not weaken, the U.S. economy.
The weakening of the yuan is having an effect on oil in two ways—it means oil is more expensive unless the U.S. dollar price falls; and it is presumed to signal a weaker Chinese economy. These two factors are working in tandem to push, and hold, crude prices lower.
OPEC recently released its growth assumptions for oil demand for the next several decades and very little growth is expected from the developed world—only 5 percent total through 2040. Emerging market economies are expected to drive the vast majority of the 49 percent predicted growth in energy demand, which equates to growth of about 1.5 percent annualized.
With most of the economic growth in the past couple decades coming from the emerging world, there are plenty of reasons to believe this will continue. But there are also reasons to be suspicious. In early 2016, the IMF reduced its projected growth rates for the global economy, and emerging markets are expected to lag. After all, many emerging market economies were built on high commodity prices, the absence of which creates headwinds for their continued growth and even their medium-term economic and social stability. Saudi and Iran’s dispute, and Russia’s general discontentment are examples of the geopolitical consequences of lower oil. These situations could flare up, especially if oil prices remain low and strain fiscal budgets. Some states have cash or a capacity to borrow beyond their rivals, and this could be the next weapon to maintain market share used by the traditional energy powers.
Commodity prices largely determine whether growth comes from the developed world or the emerging world. And oil may be the most important commodity. Until there is a high dollar, less supply, more demand, or a combination of the three, oil prices have little reason to move higher and the continued valuation of the yuan will maintain the pressure. And this has significant implications not just for the economy, but for global politics and social stability.
47 Comments on "The Odd Consequences of the Oil Price Crash"
makati1 on Thu, 14th Jan 2016 6:09 am
Rah! Rah! USA! GO! GO! GO!
You shipped all of your pollution, good paying jobs, inteligence and factories to China and now you are complaining because they still have significant growth while you are in negative territory. LMAO
“Made in the USA” is not possible anymore. IF Walmart only sold Made in the USA stuff, It would be the size of a McDonalds.
Davy on Thu, 14th Jan 2016 6:51 am
This global economic event is now more than “oil”. Oil is right in the middle of an economic unravelling of several years of malinvestment globally. This malinvestment was driven by the US financially through Fed easing policies and China through growth and internal credit policies. The rest of the world lined up at the pig trough of expansion that was nothing more than financial asset and commodity bubbles.
The business cycle that should have happened in 08 with a sharp recession purging the system systematically of bad debt was skipped. It is not at all certain we would have survived a sharp recession so there is no way to second guess what happened and should have been done. Whit that said some kind of purging was needed and avoided. Recessions clean up messes and that is why they are important. More of the same was built up instead. This was especially true with oil. US shale should never have happened. It was a direct result of Fed easing policies simple and sweet.
It takes an economy for the oil complex to function. The economy needs oil. When you have one or the other destabilized it shows up in the other. Oil is now out of its healthy parameters because the economy put it there. This is very ominous for the future. It is likely the economy is in for an extended recessionary period of across the board macro deleveraging that occurs when systematic red lines have been crossed.
The most serious red line that is being crossed is sentiment. When confidence is breached it has a profound effect on trade and exchange. It becomes like a depression of the mind that prevents productive activity. This scares the leadership more than anything because it cannot be controlled only manipulated.
Oil is caught in the middle of a demand destruction period right after a period of a commodity super spike bubble. These things do not correct easily or quickly. We will likely see an extended period of low global demand growth. This could even go negative which would be an economic “H” bomb.
Oil prices are too difficult to pin down and there are too many dynamics to point to when analyzing oil. One is by far the most important and that is the global economy. If the global economy is truly in a serious slow down with real consequences to demand I can see little hope for any sustained oil price rally that will matter for the oil complex. The damage to sources of supply both at the nation state level and reserve potential level will be the end of growth.
If we damage our supply potential enough we will never recover. This can happen in just a few years because loses will not be recovered. If the economy is really as sick as it appears to be oil as we know it is over. It will be a vicious decline down for the economy and oil. This viciousness may not be quick. It may be a slow painful event like a flood or a drought instead of a tornado. This will likely not play out all at once at least in the beginning but slowly like depletion only this pseudo depletion will be demand destruction instead of the physical product. The effects are still the same. If the economy becomes poor it will not be able to produce expensive oil. This is reality, period.
markisha on Thu, 14th Jan 2016 7:17 am
Capitalist should be grateful to their friends by greed, communists. Because of their bad economies, capitalism had space for growth so far, but now we will see
makati1 on Thu, 14th Jan 2016 7:22 am
markisha, true capitalism is over. It has been for a long time. It has caused the death of the world in so many ways. Good riddance.
The elite will soon follow it into the dustbin of history as their paper wealth evaporates. Also a good thing. They should all be sent to the South Pole, nude, and allowed to die slowly. Good thing I don’t have the ability to make that happen…lol.
Kenz300 on Thu, 14th Jan 2016 7:36 am
The world is in transition to safer and cleaner energy sources.
There Are Now More Solar Jobs In America Than Oil Jobs
http://www.huffingtonpost.com/entry/solar-jobs-rising_569409e5e4b0cad15e65be87
Cloud9 on Thu, 14th Jan 2016 8:21 am
Cheap credit did what it was intended to do. It brought demand forward. That works until all demand has been brought into the present. Then one day, you discover that the present has come and gone, and just like in the Great Depression demand is now in the past. What is left is debt saturation accompanied by economic contraction. The two together bring on waves of default.
The events leading up to great cataclysms are often misunderstood and ignored. Right now it is difficult to see the forest for the trees. A full accounting will take place in retrospect long after the dust has settled.
The Great Depression was a consequence of the overcapacity that was created to supply World War I. Agricultural and industrial sectors of the economy ramped up production to meet the needs of war. When the war ended, demand collapsed. The wizards on K Street replaced that demand with easy credit. American consumers jumped in with both feet with the buy now pay later parade.
The farmers never recovered from the loss of demand. For them the depression began in 1919. The electrification of the country pushed the demand for electrical appliances. By 1928, everybody who could get electricity easily had been supplied. Demand for electrical appliances collapsed.
The government attempted to ramp up this lost demand by sponsoring massive hydroelectric projects in the Tennessee Valley and out west. This brought about the electrification of large swaths of the south and west.
What is different now? In 1929 America was a massive industrial power house with large renovated factories that had met the needs of waring Europe. We had tremendous over capacity that would later be ramped up to become the arsenal for democracy in WW II. Second, we were the world’s largest oil exporting nation. This oil capacity allowed us to fuel the Second World War and fuel the rebuilding of Europe and Japan.
We reached peak oil production in the United States in 1970. We began the exportation of our heavy industry first to Japan and then to China during the seventies and eighties. We unpegged our currency from the gold standard and the Federal Reserve began a massive money conjuring that financed our never ending foreign wars and our exponential growth of government and the welfare state. That welfare state extends its services not only to the lowest echelons of society but it covers losses of our biggest corporations and world banks as well.
We have a command economy that is not centrally planned but is instead directed by the often competing agendas of a small group of oligarchs. This small group of oligarchs has purchased all three branches of government ending the political process. Those political system have been completely eclipsed by the bureaucracy created to serve them. The plethoria of laws, regulations and rules created by this bureacry is often times ineffectual and at cross purposes with the Constitution. The end result is a labryth of legal parlance that impedes any meaningful action and obstructs any process that could conflict with the agendas of the ruling oligarchs. Entropy will unravel this mess with a tremendous loss of life and property.
I believe that peak oil and its corresponding parabolic rise in price drove a stake into the heart of our economy. The economy collapsed in 08. Conjured trillions have kept up the façade. Japan has shown us that this process can be kept in place for decades. The Soviet Union has shown us that systemic collapse can and will happen. It also showed us that the people endure.
ghung on Thu, 14th Jan 2016 8:56 am
Cloud9 said; “Japan has shown us that this process can be kept in place for decades. The Soviet Union has shown us that systemic collapse can and will happen. It also showed us that the people endure.”
Both of those are/were in the context of a fairly stable global economy helping to support the process of adapting to their new economic realities. Not so sure how individual economies will ‘endure’ when contraction, going global, sets in. Where would Japan be if the rest of the world couldn’t afford their wares, offer credit, supply affordable energy, etc? Where would Russia be if demand for their rising energy exports had waned in the post-Soviet years? Where would they be without the Chinese economic engine kicking into high gear, and the EU becoming more reliant on Russian energy?
Just askin’, because I’m thinking we’re reaching a new inflection point, in many ways.
eugene on Thu, 14th Jan 2016 10:19 am
I think we have entered a situation never before experienced ie governments printing money like there’s no tomorrow, energy problems far from solved and a climate deteriorating at an ever increasing rate. For me, it appears all of our thinking is from a bygone era. Nothing we think applies any longer. We are in never, never land. In the franticness to escape our fears, we make up many answers which are based on a perspective that no longer exists. Living with fear/insecurity is a new phenomenon for the classes above poor in America.
markisha on Thu, 14th Jan 2016 10:45 am
Good thing I don’t have the ability to make that happen…lol.
Makati bad thing hahahahaha
curlyq3 on Thu, 14th Jan 2016 10:50 am
We are all bloody “Doomed” … capitol “D” , small “o” , small “o” , small “m” , small “e” , small “d” … “Doomed” … HA HA … anybody here remember the scene in the WC Fields movie “It’s a Gift” ?
https://www.youtube.com/watch?v=M_xwqxz1Wio
curlyq3
Apneaman on Thu, 14th Jan 2016 11:41 am
Crude at $10 Already a Reality for Canadian Oil-Sands Miners
“Canadian oil sands producers are feeling pain as bitumen — the thick, sticky substance at the center of the heated debate over TransCanada Corp.’s Keystone XL pipeline — hit a low of $8.35 on Tuesday, down from as much as $80 less than two years ago.”
http://www.bloomberg.com/news/articles/2016-01-13/crude-at-10-already-a-reality-for-canadian-oil-sands-miners
shortonoil on Thu, 14th Jan 2016 11:45 am
We put up this page almost two years ago, and stated at the time that the coming fall in crude prices would have no significant benefit for the economy:
http://www.thehillsgroup.org/depletion2_022.htm
After the fall occurred economists were proclaiming that there would be a boom as a result of the decline. Our perspective on the situation was that a fall in crude prices would not add any energy to the economy. It would simply move purchasing power from the production side to the consumer side. The sum total gain would therefore be zero.
The doldrums that the economy was experiencing at the time appeared to be the result of petroleum’s inability to add energy to the non energy producing sector of the economy. The effects of depletion were resulting in higher production energy costs, and lower quantities of energy being delivered to the consumer. That weakened the consumption side of the economy.
We appear to have recently pasted an inflection point were the cost of energy per BTU from petroleum has hit a new low for the consumer. It is presently back to 1973 levels. That resulted from a price decline that now imperils the industry’s ability to produce petroleum, and its products. The Etp Model indicates that the industry can now only continue to produce by increasing its debt load. Our calculations show that it will require $39 trillion in financing over the next decade to maintain production levels needed to service the general economy. It will be necessary to cannibalize existing infrastructure to provide those funds.
With capital stocks now slated to diminish rather than being expanded, as what has historically occurred, much of the previous impetus that has fueled economic activity will disappear. The world has now entered a period of declining wealth appreciation and declining value. The successful endeavor of the future will consist of capital preservation; not return on capital. This new economic reality will have world shattering implications.
http://www.thehillsgroup.org/
penury on Thu, 14th Jan 2016 12:44 pm
“it appears consumers have used the savings to pay down debt.” At this point I quit. Apparently the “author” does not know that consumer debt as of Dec 15 was the highest in history.Between car loans, student debts, housing prices, falling average salaries and rapidly expanding cost of living, medical insurance etc etc I wonder why anyone would think the savings on gasoline would lead to a renaissance of consumer spending.
nubs on Thu, 14th Jan 2016 1:11 pm
@Cloud9 Nice summary of the situation.
Cloud9 on Thu, 14th Jan 2016 1:23 pm
Gung I am with you in that we are at an inflection point and it could go very badly very quickly. The size of this beast and the diversity within it combined with its massive inertia may cause this thing to limp along for some time. Losing a city or two, losing the entire eastern and western seaboard is not an extinction level event. The end of civilization is not necessarily the end of the species.
I like the movie the Postman. I think that scenario is a viable outcome.
JN2 on Thu, 14th Jan 2016 3:30 pm
Cloud9, if by the Postman you’re referring to the movie Il Postino, I agree. Poetry by Pablo Neruda, white sand beaches, blue sea, sun, metaphors, beautiful women: sign me up!
wratfink on Thu, 14th Jan 2016 4:18 pm
good read:
http://oilpro.com/post/21427/solving-2016-dilemma-part-two-cascade-effect-here
makati1 on Thu, 14th Jan 2016 6:30 pm
Cloud9, what makes you think that the seaboards are the only ones to die? The center of the country is in the same trouble as the rest. Maybe even more so. Think about that. I get tired pointing out the obvious.
makati1 on Thu, 14th Jan 2016 6:42 pm
penury, maybe it is a good thing that the internet has a ‘best before’ shelf life and it is coming to it’s end? In a few more years, all that will be available anywhere on the net will be propaganda and bullshit. Time to shut it down, or at least shut down public access.
The BAU crowd are spending more and more money to try to drown out the real facts and events presented around the world by thinking people, for thinking people. With the majority of internet use being to watch porn, according to a number of sources, and another big chunk of it used to spread lies and rumors, it has become a tool of the elite to control the masses and continue to bleed them dry. Not the promise of a future of continuing education and improvement for the species.
We wasted the greatest resource humanity could ask for when we burned most of our oil to make disposable junk, war, cars and billionaires wealthy. We have done the same with the internet. Humanity does not deserve to live. Our ‘intelligence’ is a joke.
makati1 on Thu, 14th Jan 2016 6:44 pm
No Markisha, good thing, and today.
BC on Thu, 14th Jan 2016 6:50 pm
cloud9: “I believe that peak oil and its corresponding parabolic rise in price drove a stake into the heart of our economy. The economy collapsed in 08. Conjured trillions have kept up the façade. Japan has shown us that this process can be kept in place for decades. The Soviet Union has shown us that systemic collapse can and will happen. It also showed us that the people endure.”
ghung: “Both of those are/were in the context of a fairly stable global economy helping to support the process of adapting to their new economic realities. Not so sure how individual economies will ‘endure’ when contraction, going global, sets in.”
cloud9 and ghung, points well taken. That frames our predicament quite well.
As I’ve share elsewhere, the Japanese slow-motion depression and Soviet collapse began at WTI of $30 (2015$), occurring with US and global real GDP per capita at 2-2.6%, whereas today we’re barely above 0% since 2007-08.
The world cannot afford even “cheap” $30-$40 oil at ~0% real GDP per capita.
This fact has yet to be perceived, and it’s likely years away from being fully internalized.
BC on Thu, 14th Jan 2016 7:02 pm
@pen: “‘it appears consumers have used the savings to pay down debt.’ At this point I quit. Apparently the ‘author’ does not know that consumer debt as of Dec 15 was the highest in history. Between car loans, student debts, housing prices, falling average salaries and rapidly expanding cost of living, medical insurance etc etc I wonder why anyone would think the savings on gasoline would lead to a renaissance of consumer spending.”
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=398y
Pen, I take your point. I would only add parenthetically that, if one accounts for no-multiplier student loans and for low-quality, higher-risk auto loans (“driven” increasingly by subprime auto loans), growth of consumer credit is still recessionary, adding marginally little to nothing to personal consumption expenditures and final sales since 2008.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=398E
Once the change rate of auto loans peaks and decelerates, as in today, the US economy will already be decelerating to, and below, stall speed and into recession.
JuanP on Thu, 14th Jan 2016 9:01 pm
First sign of a Russian peak? https://www.rt.com/business/328895-transneft-russia-oil-exports/
Apneaman on Thu, 14th Jan 2016 11:59 pm
BHP Billiton takes £5bn writedown on US oil assets as price slump takes toll
The global mining company was forced to act after the dramatic plunge in the oil price left its expensive US exploration business weighing on the bottom line
http://www.theguardian.com/business/2016/jan/15/bhp-billiton-takes-5bn-writedown-on-us-oil-assets-as-price-slump-takes-toll
JuanP on Fri, 15th Jan 2016 6:05 am
Russia entering new recession? https://www.rt.com/business/329045-russia-recession-gdp-oil/
JuanP on Fri, 15th Jan 2016 6:24 am
Oil bust could end dollar domination, http://oilprice.com/Energy/Energy-General/Oil-Bust-Could-End-Dollar-Domination.html
27 billion barrels of oil projects cancelled, http://oilprice.com/Energy/Crude-Oil/27-Billion-Barrels-Worth-Of-Oil-Projects-Now-Cancelled.html
KSA on its knees? http://oilprice.com/Energy/Energy-General/Saudi-Arabia-A-Weak-Kingdom-On-Its-Knees.html
JuanP on Fri, 15th Jan 2016 6:57 am
Will Russia run out of money with oil at $30? http://russia-insider.com/en/business/will-russia-run-out-money-30-oil/ri12220
JuanP on Fri, 15th Jan 2016 7:23 am
Is US shale throwing in the towel? http://russia-insider.com/en/business/us-shale-throwing-towel/ri12215
Russia to slash budget by 10%, http://russia-insider.com/en/politics/russia-slash-budget-10-oil-slump-recession-bite-deeper/ri12214
Medvedev says oil prices may endanger 2016 budget, http://russia-insider.com/en/business/medvedev-says-crashing-oil-price-may-endanger-2016-budget/ri12207
Davy on Fri, 15th Jan 2016 7:28 am
“Oil bust could end dollar domination” it is more like the world is systematically running out of dollars because of currency destabilization and deflating bubbles especially in China. The Petro dollar is ending but new demands are being place on the dollar because of these new instabilities. The old economic paradigms are changing with a decaying global economy. For those of you who are praying for the dollar’s demise don’t get too worried because the dollars days are likely numbered. This situation is also very bad for segments of the US economy. There is nothing good about economic instability. In an interconnected world it is a zero sum game of decline.
makati1 on Fri, 15th Jan 2016 7:28 am
JuanP, since Russia can print rubles just like the US prints dollars, I don’t see a problem. The US prints 1/3 of its budget every year. Or about $1 Trillion plus.
Russia also has China to loan them whatever they might need. The US is not the only one who understands how to play the money game.
Davy on Fri, 15th Jan 2016 7:42 am
Looks like the jaw-boning is not working in China or the US. We all know reality runs its course eventually. Expect gyrations because these markets have been dominated by bad news is good news and or good news is good news although sometimes good news is bad news. The lies are getting twisted and leading to a vicious circle of failures. It won’t be long the jawboning will be the authorities diving for cover trying to explain away all their mistakes.
“Bullard Bounce Erased As Crude Crashes Back Below $30”
http://www.zerohedge.com/news/2016-01-15/bullard-bounce-erased-crude-crashes-back-below-30
Dow futures are now over 400 points off the Bullard Bounce highs as it appears The Fed’s ability to convince the world it will save it once again is fading. Thanks to deflation-inspiring credit growth in China (yes, you read that right) and Kuroda’s implied “we are done for now” comments, growth scares have spread across every asset class with crude and copper clubbed, bonds bid, and stocks tumbling…
JPY is heavily bid as carry trades unwind (JPYUSD futures)
Bullard Bounce dead…
And cruide has collapsed below $30…
Davy on Fri, 15th Jan 2016 8:12 am
“US Consumers Tap Out: Retail Sales End Weakest Year Since 2009 As Control Group Tumbles”
http://www.zerohedge.com/news/2016-01-15/us-consumer-officially-hibernation-retail-sales-end-weakest-year-2009-control-group-
The slowdown, including electronics stores, clothing merchants and grocers, indicates Americans probably preferred to sock away the savings from cheaper fuel instead of splurging during the holiday season. The full table breakdown shows the widespread damage across every category:
Davy on Fri, 15th Jan 2016 8:15 am
OK, you get the point with your morning joe.
BTW, I apologize in last post and link forgot quotes. Excuse me for the sloppiness.
“Empire Fed Crashes At Fastest Pace “Since Lehman”
“Against hope-strewnm expectations of a bounce from -4.6 to -4, Empire Fed printed a disastrous -19.37 – the largest miss on record. New orders collapsed, shipments plunged, and employees and workweek continue to contract. Forward-looking employment expectations also plunged. The last time Empire Fed crashed to these levels was the immediate aftermath of the Lehman bankuptcy and the global financial crisis and the peak of the recession in 2001… but we are sure this is just transitory. Not “off the lows”
Davy on Fri, 15th Jan 2016 8:16 am
http://www.zerohedge.com/news/2016-01-15/empire-fed-crashes-fastest-pace-lehman
shortonoil on Fri, 15th Jan 2016 8:31 am
“Oil bust could end dollar domination, http://oilprice.com/Energy/Energy-General/Oil-Bust-Could-End-Dollar-Domination.html“
The US dollar has remained the world’s reserve currency for the last 40 years. To be a reserve currency the rest of the world must have access to dollars, and the US has been able to fulfill that requirement by running a huge trade deficit year after year. By importing more than it exported, it was able to export a continual stream of dollars to the rest of the world. $30 oil is most likely changing that dynamic. The 7.2 mb/d that it imports provides far fewer dollars to the world at $30 than it did at $100. With insufficient dollars available, with which to buy its oil, the rest of the world will have to make other arrangements.
Little of what is happening makes sense when oil is viewed as a volumetric quantity. The oil age is ending because the price of oil is going down, not up. The decline in oil prices is not increasing demand by any measurable amount. Huge reserves in the industry no longer guarantee huge profits. The time value of money is continually going negative. The old ECON 101 models appear to be running backwards. The US dollar is losing its reserve currency status because its trade deficit is declining, not increasing.
The world’s relationship to oil is an energy relationship, not a barrels relationship. The world is not going crazy, it is merely learning that what it has held as irrefutable dogma for the last 150 years is wrong!
http://www.thehillsgroup.org/
Nony on Fri, 15th Jan 2016 8:38 am
Oil in the 20s! Party time for consumers!!!
https://www.youtube.com/watch?v=UJOjTNuuEVw
JuanP on Fri, 15th Jan 2016 8:39 am
Mak, I agree. I am 100% certain that Russia will make it through these crises one way or another, they’ve been around for 1,000 years.
shortonoil on Fri, 15th Jan 2016 9:24 am
“Oil in the 20s! Party time for consumers!!!”
With oil in the $20’s oil producers go broke, the economy goes into a depression, and no one has a party.
http://www.zerohedge.com/news/2016-01-15/worlds-largest-miner-books-massive-72-billion-writedown-us-shale-assets
A lot of people will suffer very badly. It won’t be long before the corps figure out that they just sat in a pile of their own crap?
makati1 on Fri, 15th Jan 2016 9:38 am
JuanP, and China has been around for 4,000+ years. Whereas, the US is only about two centuries old and has no real culture except war and greed.
marmico on Fri, 15th Jan 2016 10:14 am
The US dollar is losing its reserve currency status because its trade deficit is declining, not increasing.
What a “money illusion” fuctard.
GregT on Fri, 15th Jan 2016 10:20 am
“US Consumers Tap Out: Retail Sales End Weakest Year Since 2009 As Control Group Tumbles”
Shouldn’t be all that difficult to figure out why China’s manufacturing sector is slowing down…….
GregT on Fri, 15th Jan 2016 10:25 am
“Oil in the 20s! Party time for consumers!!!”
Except for the inconvenient truth that the consumers can only consume what the producers can afford to produce.
So party like there’s no tomorrow happy consumers, drive, shop, consume!!!
Kenz300 on Fri, 15th Jan 2016 10:35 am
Frackers going broke……….
now maybe the earth quakes will stop…….
70 More Earthquakes Hit Oklahoma, Averaging Nearly Three a Day in 2015
http://ecowatch.com/2016/01/11/fracking-earthquakes-oklahoma/?utm_source=EcoWatch+List&utm_campaign=1fd6621515-Top_News_1_11_2016&utm_medium=email&utm_term=0_49c7d43dc9-1fd6621515-86023917
Apneaman on Fri, 15th Jan 2016 1:36 pm
Oil plummets to $29, dragging world stocks lower
“Unsettled investors snapped up gold and other safe-haven assets amid fears of a global economic slowdown, coupled with concerns about a potential credit default as lower commodity prices make payments by creditors in emerging markets difficult.
Major stock indices in Europe closed down more than 2 per cent, while Wall Street stock indexes tumbled between 2 and 3 per cent as global crude benchmark Brent lost 6 per cent to below $29 a barrel at one point, capping a decline of almost 14 per cent for the week.”
http://www.theglobeandmail.com/report-on-business/international-business/crude-dives-as-market-braces-for-more-iranian-oil/article28209515/
Apneaman on Fri, 15th Jan 2016 3:09 pm
Walmart to close 269 stores in U.S., South America
http://www.cbc.ca/news/business/walmart-closing-stores-1.3405511
shortonoil on Fri, 15th Jan 2016 5:32 pm
“Brent lost 6 per cent to below $29 a barrel at one point, capping a decline of almost 14 per cent for the week.”
The shut-ins are not far away if prices stay in this range. Every Gb of production lost will reduce world GDP by about 3%. We are now teetering on the edge of a precipice.
Davy on Fri, 15th Jan 2016 5:52 pm
That precipice is martial law if we are not careful. Oil is like food and water for survival. Oil will have to be delivered or people will die. If the economy can’t do it then the military likely will.