Dropping Oil Prices Mean Many Things, And Most Of Them Are Good!

Collapsing oil prices are (obviously) bad for oil companies and the people who work for them. As much as I cheer the pain inflicted on Russia and Iran, oil is a big business in America, and as prices drop it causes local and regional disruptions.

But the obvious benefit is a decrease in energy prices for everyone, and that dwarfs the economic damage to the oil industry. That benefit is coming at the perfect time, when the dislocation of the corona virus is slowing demand for things like air travel, and threatens, at least in the short term, the Trump Economic miracle.

The narrow focus of the financial media make a collapse in the oil market sound like Armageddon, but it isn't, so the hysteria over the next few days if this price war actually happens will be mostly hyperbole, and will mask the benefits...

OPEC deal collapse sparks price war: '$20 oil in 2020 is coming'

″$20 oil in 2020 is coming,” Ali Khedery, formerly Exxon’s senior Middle East advisor and now CEO of Dubai-based strategy firm Dragoman Ventures, wrote on Twitter on Sunday. “Huge geopolitical implications. Timely stimulus for net consumers. Catastrophic for failed/failing petro-kleptocracies Iraq, Iran, etc - may prove existential 1-2 punch when paired with COVID19.”

A big question is how the American and Canadian fracking industries will weather this storm. They have seen ups and downs in prices before, and hopefully they have become more efficient...leaner and meaner and more able to withstand the business cycle.

&topic=world_news"> posted by CBD at 12:15 PM

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