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Oil and the Economy

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Wd40
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Re: Oil and the Economy

Postby Wd40 » Wed, 07 Jan 2015 3:30 pm

This guy also agrees with me:
http://blogs.reuters.com/edward-hadas/2 ... ain-wrong/

The price for producers is one thing; the cost for consumers is something else. There are good reasons to charge far more than the cost of production. Oil is a non-renewable resource which pollutes as it is used up, and dependency on imports, however cheap, brings political risk.

The correct price for users should be just low enough to keep cars on the road but high enough to restrain usage and to encourage the development of currently more expensive but ultimately more attractive alternative sources of energy. There is no way to calculate the precise optimal price, but the policies in Europe and Japan – taxes account for about 60 percent of the petrol price at the pump – are on the right track.

The United States is an outlier with its low 15 percent tax rate on gasoline. That is clearly too low to give strong incentives for conservation and investment in renewable alternatives. The U.S. government does have many regulations to prod industry in desired directions, but higher taxes speak particularly clearly.

In an ideal world, the price of oil for producers would be lower and more stable than today, while the average price for consumers would be higher and more stable. The world will never be ideal, but oil pricing can be improved.

Primrose Hill
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Re: Oil and the Economy

Postby Primrose Hill » Wed, 07 Jan 2015 3:57 pm

my 2cents. I have no idea if these are collusion by US & SA to squeeze Russia & Venezuala.
however, and its all jumbled up, ok.
1. FTSE lost GBP33m a couple of days ago. DOW, I'm sure will follow suit if not already, I havent checked so no idea.
2. oil back currency like Canadian dollar and MYR are tanking.
3. budget deficit will widen.
4. unemployment will rise, direct oil employment and indirect ones too.
5. flipside, with their currency tanking, cheaper exports.
6. deflation for some countries and inflation for others with their buying power
7. however, are energy companes passing the cheaper rates to consumers? esp UK.
8. not forgetting in UK most of the pricce of petrol consists of taxes.
9. how many pension fund managers invests all of our pension monies not only with oil majors but also energy companies? and how will our pension be looking now?
10 what about commodity hedge funds?

just some of my jumbled up thoughts

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Wd40
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Re: Oil and the Economy

Postby Wd40 » Wed, 07 Jan 2015 8:20 pm


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JR8
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Re: Oil and the Economy

Postby JR8 » Wed, 07 Jan 2015 10:08 pm

louise.honner wrote:I definitely don't think it is a plot to bring down Putin


Google on 'putin oil price', and have a look at some of the articles that returns. They're not tabloid gossip, they're largely well informed macro-economic analyses.

Putin's nuts are in a vice. Savour it.
'Do it or do not do it: You will regret both' - Kierkegaard

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AndrewV
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Re: Oil and the Economy

Postby AndrewV » Thu, 08 Jan 2015 10:45 am

Saudi Arabia trying to reduce the oil price to make US shale/oil sands investments go bust is the story for the masses. Saudi Arabia will do whatever the US wants them to. The royal family needs the US to stay in power and lack any kind of ability to make global plays like this by themselves (perhaps in the 1980's they tried, but we all know how that turned out).

this is a play to make putin's life tough, to show that you can't go on making the "good fellas" look like idiots without any kind of come-uppance. It's interesting to see what Putin will do in retaliation, will he make good on selling the s-300's to Iran? how about the s-400s? :lol:


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