Low Oil Prices (CL) are great at the Gas Pump and for Heating Your Home, but is it REALLY good for the Economy? I Have to Say NO on This One!
What can I say my friends, Light Sweet Crude has been trading below $52.00 since July 24th, 2015. This is great if you’re in the transportation business or if you have to buy fuel to commute to work, but these low prices are having a ripple effect across the economy, no matter how you slice it. With the CL steadily declining for the last 16 or 17 months, losses are affecting businesses not just here in the United States, but other parts of the world as well. When the energy industry suffers, everyone suffers. Look, I don’t like high fuel prices any more than you do, but low oil prices cost people their jobs, businesses lose revenue, and housing prices plummet.
The biggest problem is that when organizations like OPEC keep the prices down, it becomes LESS cost effective to produce oil here in the United States. Once this happens, oil exploration, drilling, and refineries begin to lose money hand over fist. In order to maintain the business and overall profits, those companies will begin to lay off workers to protect capital. This is understood: No oil production, why would they need to have a work force? OK, that being said, they lay people off; who else is REALLY affected?
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