Why plunging oil prices now hurt—yes hurt—the U.S. economy

[endicom]

Market Watch
William Watts
Nov. 20, 2018

Falling oil prices are usually greeted with cheers, especially at the gas pump. But for the economy, the equation has changed thanks to the transformation of the U.S. back into a major oil producer courtesy of the shale revolution.

“The key point to remember here is that the lower oil prices are now a net drag on the U.S. economy, because the [capital-expenditure] cutbacks triggered in the shale oil business outweigh the gains to consumers’ spending from cheaper gas prices,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a Monday note.

More... https://www.marketwatch.com/story/heres-how-much-plunging-oil-prices-will-hurt-yes-hurt-the-us-economy-2018-11-20?mod=newsviewer_click

[Fishrrman]

Nonsense.
Simply nonsense.

Lower energy prices help the economy EVERYWHERE, with the exception of those who actually produce the energy.
Lower costs for manufacturers.
Lower costs for transportation.
Lower costs for consumers.

Funny how folks have short memories.
I don't.

The single most destructive element of the 1970's was rising (skyrocketing) petroleum prices due to the oil embargo of 1973. The high prices of fuel compounded rising prices and inflation everywhere.

Remember "Whip inflation now"?
The reason we HAD inflation was because of the embargo and energy prices.

I want to see oil prices KEEP coming down.
Glad to see light crude drop a little more today (just looked, it's at 53.6).
$40 -- or LESS -- sounds 'bout right to me.

[Dexter]

Nonsense.
Simply nonsense.

Lower energy prices help the economy EVERYWHERE, with the exception of those who actually produce the energy.
Lower costs for manufacturers.
Lower costs for transportation.
Lower costs for consumers.

But the oil companies! 

[goodwithagun]

With my Kroger feel points I paid 1.29/gal to fill ‘er up plus two 5-gallon containers. I clicked my heals and used a small portion of the savings on a PSL at Starbucks.

[IsailedawayfromFR]

The only way plunging oil prices hurt the US economy is if the DC tribe decides it time to enact higher gasoline taxes to hoodwink consumers.

[roamer_1]

Now if only we could get steel and lumber prices down... Like it used to be...

[endicom]

I can see where this could be a short term negative for the economy but think it should be a long term positive. If, that is, all else remains the same as all else never does.

[jmyrlefuller]

Nonsense.
Simply nonsense.

Lower energy prices help the economy EVERYWHERE, with the exception of those who actually produce the energy.
Lower costs for manufacturers.
Lower costs for transportation.
Lower costs for consumers.

Funny how folks have short memories.
I don't.

The single most destructive element of the 1970's was rising (skyrocketing) petroleum prices due to the oil embargo of 1973. The high prices of fuel compounded rising prices and inflation everywhere.

Remember "Whip inflation now"?
The reason we HAD inflation was because of the embargo and energy prices.

I want to see oil prices KEEP coming down.
Glad to see light crude drop a little more today (just looked, it's at 53.6).
$40 -- or LESS -- sounds 'bout right to me.

Heck, go back to 1999, then 2008.

You can't tell me $4 a gallon gas didn't have an impact on the recession that followed later that year. Or that less than $1 a gallon gas didn't fuel the rise of the dot-coms.

[Absalom]

Nonsense.
Simply nonsense.

Lower energy prices help the economy EVERYWHERE, with the exception of those who actually produce the energy.
Lower costs for manufacturers.
Lower costs for transportation.
Lower costs for consumers.

Funny how folks have short memories.
I don't.

The single most destructive element of the 1970's was rising (skyrocketing) petroleum prices due to the oil embargo of 1973. The high prices of fuel compounded rising prices and inflation everywhere.

Remember "Whip inflation now"?
The reason we HAD inflation was because of the embargo and energy prices.

I want to see oil prices KEEP coming down.
Glad to see light crude drop a little more today (just looked, it's at 53.6).
$40 -- or LESS -- sounds 'bout right to me.

-----------------------------------
Indeed, simply nonsense squared.
Lower input cost increases both revenue and margins.
Both Investors Daily and the Financial Times are reporting that the US
is now a net exporter of LNG and will be for Crude, as well, by late 2019.
WS analysts and their fans never leave the weeds, arguing over every
co-efficient, decimal and exponent, yet never grasping the larger picture.
The geological structure of the US has abundant oil as well as shale
formations, some at great depth which have filtered oil over millions of years.
As a consequence our oil requires little if any costly refining and as such
commands a high premium market price.
Nations such as Iran, Nigeria and Venezuela, among several, have no such
advantage.
Our BOP over the next generation will reflect this reality!!!

[GtHawk]

Nonsense.
Simply nonsense.

Lower energy prices help the economy EVERYWHERE, with the exception of those who actually produce the energy.
Lower costs for manufacturers.
Lower costs for transportation.
Lower costs for consumers.

Funny how folks have short memories.
I don't.

The single most destructive element of the 1970's was rising (skyrocketing) petroleum prices due to the oil embargo of 1973. The high prices of fuel compounded rising prices and inflation everywhere.

Remember "Whip inflation now"?
The reason we HAD inflation was because of the embargo and energy prices.

I want to see oil prices KEEP coming down.
Glad to see light crude drop a little more today (just looked, it's at 53.6).
$40 -- or LESS -- sounds 'bout right to me.

Ahem, dear sir, your statement is inaccurate. Lower oil prices mean lower fuel prices, lower fuel prices mean less fuel tax receipts, so lower oil prices hurt Big Brothers economy. Especially greedy big brothers like the socialists running California.

[Smokin Joe]

Lower fuel (and crude oil) prices reach a point where people won't go out there and bust ass 12 hours or more a day for chump change. When that happens, wells don't get drilled, reservoirs deplete, and there is a shortage of crude oil, which causes prices to rise, which gets the speculators in rut, and causes price spikes and 'booms'.

Enjoy the 'bust', we worked hard for it and will suffer in reduced benefits, wages, and jobs.

It will be more expensive next time around.

[DB]

Ahem, dear sir, your statement is inaccurate. Lower oil prices mean lower fuel prices, lower fuel prices mean less fuel tax receipts, so lower oil prices hurt Big Brothers economy. Especially greedy big brothers like the socialists running California.

Aren't most those taxes on a per gallon rate and therefore not affected by price (other than if the gas is cheaper and people drive more then they buy more gas).

[Smokin Joe]

Aren't most those taxes on a per gallon rate and therefore not affected by price (other than if the gas is cheaper and people drive more then they buy more gas).

Yep, fixed tax per unit volume (per gallon). This is the time (when people are relieved by lower cost at the pump) when government seeks to raise gasoline taxes, because it will still be cheaper than a year or two ago.
Watch for it.