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Positives of low oil
Old 01-11-2016, 12:50 PM   #1
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Positives of low oil

As oil hits new lows the stock market is sinking. But isn't cheap energy a stimulus? If everyday people have more money in their pockets after filling their vehicles, won't they eventually spend it? And won't that create more profits for companies?

Seems to me there is more good to low oil prices than bad.
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Old 01-11-2016, 12:53 PM   #2
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Like all economic changes, there are pluses and minuses. It depends on your perspective.

Notley expresses concern for families as job losses grow in Alberta | Calgary Herald
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Old 01-11-2016, 01:05 PM   #3
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As oil hits new lows the stock market is sinking. But isn't cheap energy a stimulus? If everyday people have more money in their pockets after filling their vehicles, won't they eventually spend it? And won't that create more profits for companies?

Seems to me there is more good to low oil prices than bad.
I think the strong dollar is hurting a lot of companies that export goods, especially to canada
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Old 01-11-2016, 01:23 PM   #4
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When oil goes up, the market falls. When oil goes down, the market falls.

Stability is better than uncertainty, big moves cause many people (especially speculators) to pull their money out and reevaluate.

Also, Stimulating the economy is not the same thing as stimulating the market valuations. At least in the short term.


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Old 01-11-2016, 01:29 PM   #5
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Airline and trucking companies just lovin it.
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Old 01-11-2016, 01:36 PM   #6
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It's a small positive for me when I go to fill up my Escape.
Unfortunately for me, I own kinder morgan stock.

nuff said
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Old 01-11-2016, 01:50 PM   #7
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It's a small positive for me when I go to fill up my Escape.
Unfortunately for me, I own kinder morgan stock.

nuff said
Hey, they are still paying a dividend!
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Old 01-11-2016, 01:56 PM   #8
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Airline and trucking companies just lovin it.
Yea, air fares are dirt cheap!
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Old 01-11-2016, 01:59 PM   #9
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Yea, air fares are dirt cheap!
airlines also hedge fuel prices so they are probably making up for the worthless options they purchased, my guess anyway
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Old 01-11-2016, 02:56 PM   #10
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When oil goes up, the market falls. When oil goes down, the market falls.

Stability is better than uncertainty, big moves cause many people (especially speculators) to pull their money out and reevaluate.

Also, Stimulating the economy is not the same thing as stimulating the market valuations. At least in the short term.


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Short term yes, but long term, low energy prices would seem to be good for the economy.
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Old 01-11-2016, 03:39 PM   #11
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I agree that there are many benefits to many players with low oil prices. Here is what I see as the downside, as it pertains to equity markets. Low oil (and nat gas) prices lead to reduced earnings for energy companies, which make up a sizable portion of the market, so their stocks fall. These low prices also dampen activity to search for and extract the energy. These activities and the hardware/services to support them are also important to economic activity. Lastly, oil prices are seen as a partial proxy for worldwide economic activity in general. When oil prices are low/falling, it is seen as a sign of economic weakness which as a rule is bad for business, profits, and therefore equity prices.
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Old 01-11-2016, 03:41 PM   #12
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It's a small positive for me when I go to fill up my Escape.

Unfortunately for me, I own kinder morgan stock.



nuff said

I think a lot of people have had the gas savings swallowed up by something before they got the extra cash in their pocket. I maybe am saving $75 in gas. Health insurance up $250 in past 12 months and internet/cable up $15. So that alone swallowed up my ability to contribute more to the economy with my gas savings.


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Old 01-11-2016, 03:43 PM   #13
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On the plus side, gasoline here just fell to below $2/gallon.
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Old 01-11-2016, 03:56 PM   #14
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The problem is those darn Millenials who are not falling for the work harder, earn more money, spend more money, borrow even more money, then work even longer and harder, and be in debt for the rest of your life paying more and more interest. These young upstarts are actually paying off debt and freeing themselves from the chains of debt and over consumption.
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Old 01-11-2016, 04:00 PM   #15
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Low oil prices however would seem to eventually help Europe and Asia (i.e. Japan, China and Korea) that don't have internal supply to rebound from their sluggish economies. In the short term there will be pain, but in the longer term this should be a blessing.
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Old 01-11-2016, 04:07 PM   #16
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It's a small positive for me when I go to fill up my Escape...
Pfftt... It's a big positive for me when I fill up my gas-guzzling RV. At 9 mpg, one time in a long travel day I had to refuel in the morning and in the evening too. And this was in California, the land of the $4/gal gas back then. Oh man, it hurt to no end.
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Old 01-11-2016, 08:57 PM   #17
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I filled up my car's tank today. Did not look at the price.
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Old 01-11-2016, 10:24 PM   #18
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Low oil prices however would seem to eventually help Europe and Asia (i.e. Japan, China and Korea) that don't have internal supply to rebound from their sluggish economies. In the short term there will be pain, but in the longer term this should be a blessing.
Yes, but its very much tempered by the fact that approx 25% of the "decrease" in oil price you see, is really the USD becoming stronger than other currencies.

So the US folks see a huge drop in oil prices.

So if you live in Korea you don't see such a big drop in the oil price as the WON has decreased in value compared to the USD (and oil is sold in USD).

Same in Canada, since the CDN went down about 30% to the USD, they are not seeing the big drop in oil prices.
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Old 01-11-2016, 10:32 PM   #19
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I saved $25 filling up our truck last week and lost $25,000 last week with the market drop. I would rather have paid $50 and kept the $25,000.
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Old 01-11-2016, 11:41 PM   #20
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I wish I lost only $25K since the beginning of year. And I just filled up my car; it took but $18 total. To save more with cheap gas, I would need to take my RV on a trip, and there's nowhere to go in the winter.
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