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United States Oil Message Board

  • ext4r ext4r Feb 11, 2013 8:58 PM Flag

    Oil heading to $70s and $60s one way or another

    If oil prices don't soon ease on down to $70's and $60's, then the ensuing recession will cause an oil crash that could drop oil to the $30s and even $20's.

    We have an oil (fossil fuel) based economy. We use oil VERY frivolously and our frivolous use of oil keeps our economy humming. This is all made possible by cheap oil (cheap fossil fuel) prices. But when oil prices get too expensive, we EASILY cut our frivolous usage of oil, and that cuts jobs in frivolous industries, and that causes a chain reaction that sends our economy nose-diving into recession.

    Recession = far less use of oil(and other commodities) = crashing demand = MUCH LOWER COMMODITY PRICES.

    Probably 80% of our oil/fossil fuel usage is frivolous and is EASILY cut (with painful outcomes). You may think that driving to work isn't a very frivolous use of oil, but look how many folks have jobs in frivolous industries (or jobs that support those frivolous industries):

    Golf course employees
    Fitness club employees
    Movie Business
    Television business
    Generating power for frivolous use
    The entire city of Las Vegas
    The Airline Industry
    The toy industry
    The fashion industry
    The vacation industry
    The ski/boarding industry
    The Junk food industry
    The hotel industry (most of it)
    The restaurant industry (most of it)
    The entire state of Hawaii
    The sports industry
    The motor boating industry

    All of those things are nice frivolities that can be easily reduced/cut when oil prices rise. We could cut our oil/fossil fuel usage by a HUGE percentage and still keep ourselves minimally fed, clothed, and housed. Our current economy can't afford oil above about $60-$70. If speculators don't bring prices down the easy way, then the coming recession will bring prices down the hard way (via recession)... and that could result in oil prices hitting $30, just like they did 4 years ago in the last recession (that also sank gold to $700 and silver to $8)

    Yes, we could have a temporary (crisis-caused) spike in oil prices, but that spike would last about 2 weeks before we'd see the economy crash and see demand PLUMMET, and see HUGE JOB LOSSES. Oil prices above $90 are NOT sustainable even in the best of times. Currently, oil prices above about $60- $70 are NOT sustainable. But a recession will likely cause us to overshoot to the downside with oil hitting $40-$55. If it gets really bad, we could see oil drop to $20-$30 (That would push the US dollar MUCH higher and send gold and silver prices plunging).

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