Thank You President Obama…From the Oil Industry
September 17, 2012 Leave a comment
A few months ago we wrote a blog on the development of alternative fuel sources to crude oil caused due to the barrel exceeding $100 and asked you at what price point will oil be unsustainable in The Fall of Oil and Gas. Most of this summer the barrel price did remain well below $100 US, but now we are witnessing crude oil and other resources rising again quickly.
So what has caused this rise in prices when oil levels are still maintaining high stocks and a the availability of substantial viable off shore oil fields.
Well many sources like USA today and The Business Journal put some blame at middle east turmoil but mostly on the new US economic stimulus packages. The new package and continued low interest rates are forcing the US dollar down and creating further market uncertainties of long term stability.
For us in piping this may seem great overall, we should expect this translating into oil companies green lighting expansion projects in both drilling and refineries. This may not come true however as the oil and gas companies may look at increased productivity as a hindrance to higher prices and profits.
The issue is though these higher prices may in fact create a down turn in the economy and not a bump, even with the positive increase in the stock market. Articles from Forbes and the Washington Post discuss how these prices lower consumer confidence and increase the price on every day goods leaving the average citizen with little disposable income.
What is your feeling about the rising price of oil? Is it good for the piping industry or will it have the same negative impact it is expected to have on the overall economy?