Military Review

Expensive oil will destroy the United States

18
An interesting thought was recently expressed in Forbes magazine by columnist Brad McMillan. According to him, the basis of the current US economic recovery is based on cheap oil, since low prices for "black gold" allow consumers to save less and spend more. If oil-market games lead to higher prices, then Americans will lose the economic advantages of cheap raw materials.




How to write in a journal "Forbes" Columnist Brad McMillan should not underestimate some of the global risks. It is necessary to consider the factors that may affect the economy in the United States, said the journalist. He believes that oil is the most likely cause of influence here.

The normalization of prices that has developed now “will not last forever.” Prices slowly returned to normal at the marginal cost of production, reaching 40-60 dollars per barrel. They will probably remain in this range, the analyst notes. True, it depends on a number of factors.

Today, the author recalls, global oil production exceeds demand, but only slightly, within 1-2%, according to the International Energy Agency (IEA). However, we must not forget that the excess supply is artificially supported by such an oil show as Saudi Arabia. The Saudis are pumping oil to the limit of their capabilities. And at the same time other suppliers of “black gold” “do the same,” the observer notes.

Excessive supply will soon disappear, as the demand for oil still continues to grow. And if we assume that suppliers will reduce production, even quite a bit ... The existing favorable conditions will eventually disappear - and disappear for a long time. It will happen even faster if there is a failure somewhere in the production and supply chain.

The author does not advise to underestimate the advantage of low oil prices for the US economy.

He points out that the basis for the current recovery of the US economy, as well as Europe and China, and even more so than the US, is cheap oil.

Lower prices for raw materials allowed consumers to spend more and save less, the business profit level increased (“outside the energy sector,” the analyst says). In general, there was a "improvement of the economy throughout the planet."

Yes, we all used to read about the dangers of high oil prices; much less write about the benefits of cheap oil. And it is necessary to know.

Look: Europe and China import two to three times more oil as a percentage of GDP than the United States. Higher oil prices would inevitably affect the growth prospects of all these economies. Japan should also be called here. If oil prices rise sharply (“which is quite likely”), then global fears “will return” to the world economy. Risks should not be underestimated!

Given the growth in current demand (even if supply remains constant), the United States should increase oil production so that world market prices keep in the specified range of $ 40-60 per barrel. Otherwise, the economic security of the country may be undermined.

However, OPEC can join the game (“unlikely, but possible,” the author notes). Or here is another reason: US oil production began to fall faster than expected. This alone can remove most of the excess oil from the market.

With the rise in oil prices, the balance of supply and demand will move to normal. But prices will continue to grow. If the US suppliers have time to answer, prices will not be able to reach the “economically dangerous level” and at the same time allow the fuel and energy industry to function. Economic growth will continue. And this would be a very good result that the US should hope for.

So, we add, Mr. McMillan frightens Americans by the dangerous effects of rising oil prices and recommends that he act cautiously, strategically playing to outpace the market. The optimal price range he considers the level in 40-60 dollars per barrel. Higher prices will adversely affect the growth of the American as well as the European economy. Today's low prices for “black gold” allow US consumers to save less and spend more.

April 25, we recall, oil prices did not rise, but decreased. Speculators were the same game, focusing on the gap between supply and demand.

Both the cost of June futures for Brent and futures for WTI declined.

An additional factor affecting the price is increasing the production of "black gold" by Iran. Since the lifting of the sanctions, the Iranian increase in oil production amounted to a million barrels. In addition, Saudi Arabia is expanding its capacity at one of the large fields. This will allow it to maintain production at 12 million barrels per day, reports Interfax.

This week, US Federal Reserve statements will have a key impact on oil prices. “To lead. Economy".

The dollar index over the past three trading sessions has grown strongly, so the fact that oil prices began to decline is not surprising, the portal notes. Further dollar dynamics will depend on market expectations regarding future Fed actions. The next meeting of the regulator will be held this week.

Well, in Russia the price of oil still affects the price of the currency. April 25, apparently due to the fall in oil prices, the ruble exchange rate declined against the dollar.

Observed and commented on Oleg Chuvakin
- especially for topwar.ru
18 comments
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  1. Mavrikiy
    Mavrikiy April 26 2016 06: 04
    +1
    High prices "ruined" Russia, now the United States? Well, let it be, but we will breathe freely. Swing however. China will rush to build the "Power of Siberia" at last.
    1. Ratmir_Ryazan
      Ratmir_Ryazan April 26 2016 10: 32
      +3
      Quote: Mavrikiy
      High prices "ruined" Russia, now the United States? Well, let it be, but we will breathe freely. Swing however. China will rush to build the "Power of Siberia" at last.

      You would think that if oil and gas were cheap, then Russia would immediately start making smartphones better than iPhones and cars better than Mercedes and computers with their Russian processors began to collect))) ... And so the oil was in the way for us)))) No, everything would be even worse, and by a lot ... It would be the same thing - only without what was done with money from the sale of oil and gas, namely, salaries would be less and the army would be weaker and roads would be worse and houses built less by a lot, etc. Because we did all this thanks to these petrodollars ... Including we repaid the state debt of 150% of the GDP that Yeltsin and his corrupt half-witted reformers left ... Look, we have most of the regions subsidized !!!
      1. Shick
        Shick April 27 2016 09: 13
        0
        Overwhelming majority...
  2. Andrey Yuryevich
    Andrey Yuryevich April 26 2016 06: 23
    +6
    Expensive oil will destroy the United States
    the next death of the USA ... something agony lasts a very long time. wassat
    1. Angara
      Angara April 26 2016 06: 39
      +2
      Quote: Andrey Yurievich
      something agony lasts a very long time.

      Or maybe it's not agony? Maybe the USA as a cat has 9 lives ??? wassat
      1. Blackmokona
        Blackmokona April 26 2016 07: 11
        +1
        This Koshchei has already been buried more than a million times, but life does not end there.
        And so the United States does not care about oil, expensive oil riches on shales, the cheap oil industry feels great.
    2. atalef
      atalef April 26 2016 07: 10
      +4
      Quote: Andrew Y.
      Expensive oil will destroy the United States
      the next death of the USA ... something agony lasts a very long time. wassat

      Expensive oil will ruin the United States, before that there were articles - expensive oil is beneficial to the USA, shale oil is nonsense, gas is nonsense, tanker is opal - but they all have one thing in common - the United States will die tomorrow. These analysts' tales from the word a n and l
      1. gaura
        gaura April 26 2016 10: 59
        +2
        People want to believe that. Do not take away people's faith))
        If you listen to the analysts, then Russia has already collapsed, then Ukraine will fall apart, just a little more and the USA will plunge into the permanent civil war of the states and then the European Union there too. Nobody has predicted a collapse in China, where the analytics are looking!
    3. OlegV
      OlegV April 26 2016 07: 53
      0
      Expensive oil will destroy the United States


      figs there ...... waste products do not drown, unfortunately ....

      Axiom.
    4. Ratmir_Ryazan
      Ratmir_Ryazan April 26 2016 10: 53
      +1
      This analyst doesn’t agree much ... For example, the world consumes about 90 million barrels of oil per day and 18 million is consumed by only one country in the USA ... A quarter of the world's oil is consumed by one country and not the largest in population .. Russia consumes 3 million barrels per day ... But that is not all, the USA has sharply increased production in recent years, from 5 million to 10 million barrels per day, and at the same time they blame Saudi Arabia for lowering the price of oil !!! Which over 10 years increased production by only 10-20% !!! The USA itself has fallen off the oil market !!! And now, attention at such rates of oil production in the United States remains for only 6-8 years (look at the proven reserves and divide them by the rate of production), that is, if now they are buying 8 million barrels a day, they will soon buy all 18 million barrels per day, and this is very very significant !!! All this will sharply raise oil prices first, then grain prices, since it will become profitable to make bioethanol ... Who will benefit from this - Russia))) Anyway, everything is fine with us and with oil and grain))) ... But in the USA, things will not be so good - firstly, you will have to buy all the fuel, and it will be expensive, which will affect the population very much because they depend on gasoline very much because they are forced to use cars everywhere and often, even in cities with millionaires public transport ... The trouble of a single-story urban building ... Apartment buildings they did not take root, blacks did not pay the communal apartment))) ... The increase in transportation costs for the transport of goods, etc. Of course, there will be no collapse in the United States, but the fact that it carries a big negative for the economy and power of the country is a fact ... I believe that the latest conflicts that the United States are organizing in the Middle East and Ukraine are precisely connected with this .. They want to take control of the oil and fertile fields of Ukraine and to spoil Russia as much as possible ...
  3. godofwar6699
    godofwar6699 April 26 2016 06: 27
    +1
    do people still think Expensive oil will ruin the US? lol
    1. 0255
      0255 April 26 2016 10: 50
      +1
      Quote: godofwar6699
      do people still think Expensive oil will ruin the US? lol

      Yes laughing Can still not believe in the imminent collapse of the United States maliciously zaminusut and call a traitor, the 5th column, a liberal, Svidomo, on which Stalin is not laughing
      1. godofwar6699
        godofwar6699 April 26 2016 12: 56
        +1
        Quote: 0255
        Quote: godofwar6699
        do people still think Expensive oil will ruin the US? lol

        Yes laughing Can still not believe in the imminent collapse of the United States maliciously zaminusut and call a traitor, the 5th column, a liberal, Svidomo, on which Stalin is not laughing

        good
  4. Bramb
    Bramb April 26 2016 06: 28
    +4
    Well, in Russia the price of oil still affects the price of the currency. April 25, apparently due to the fall in oil prices, the ruble exchange rate declined against the dollar.
    -----------------
    Also, futures fell, trends fell, the Dow Jones index fell, but the blue-chip index rose slightly.
    This is all extremely important information for people! )))
    Even me, who is engaged in import-export, just doesn’t give a damn about it from the bell tower (I registered a currency clause - and I don’t give a damn), and even to citizens who are not connected with these things for a long time. Someone confuses the economy with speculation. He analyzed the actions of speculators, and made conclusions about the economy. Moreover, how many new industries are being built - not a word! Onaliteg ...)))
    1. rotmistr60
      rotmistr60 April 26 2016 07: 31
      0
      Also, futures fell, trends fell, the Dow Jones index fell, but the blue-chip index rose slightly.
      It's all crucial for information people! )))

      I will support your thought. Of course, an ordinary person doesn't give a damn about it. International speculators and Russian billionaires, who are interested in this on one side, and the people on the other. Another thing is that the actions of speculators ultimately affect the overall well-being of man.
      And you criticize the author in vain.
  5. wandlitz
    wandlitz April 26 2016 06: 42
    +2
    Expensive oil will destroy the United States...
    We’ll wait and see ... But if this happens we will not worry.
    1. 0255
      0255 April 26 2016 10: 53
      0
      Quote: wandlitz
      Expensive oil will destroy the United States...
      We’ll wait and see ... But if this happens we will not worry.

      The United States with the dollar system is about to fall apart, but where is this collapse?
      1. Amurets
        Amurets April 26 2016 15: 04
        0
        Quote: 0255
        The United States with the dollar system is about to fall apart, but where is this collapse?

        Somewhere on the horizon! Just about to appear.
    2. vlad_vlad
      vlad_vlad April 26 2016 14: 29
      0
      Quote: wandlitz
      Expensive oil will destroy the United States...
      We’ll wait and see ... But if this happens we will not worry.


      I doubt that you will not worry. We are all sitting in one boat - if the Americans or Europe or China begin to sneeze, then all the snot will flow. Who will buy oil, gas, ore, etc. if the growth of the economy in America (China, Europe ...) stops?

      Of course I understand your blue dream - Krant America! - but I don’t see an option in which I don’t pull the others down either.
  6. Dex
    Dex April 26 2016 07: 42
    +1
    "Save less and spend more ..." Oh, this agonizing capitalism. We are taking leaps and bounds towards massive impoverishment of the population with the subsequent reformatting of the world's financial system
  7. sa-ag
    sa-ag April 26 2016 07: 47
    +1
    The high oil price makes shale oil production cost-effective, which accordingly lowers the price down, such a swing
  8. krops777
    krops777 April 26 2016 08: 25
    +2
    Another injection from the Fed in the form of printed greens, which once saves the bloated US economy.
  9. Ros 56
    Ros 56 April 26 2016 09: 02
    +1
    We are not being killed by energy prices, they are the same for all. We are ruined by the lack of a coherent and independent monetary policy, the lack of a coherent economic policy built in the interests of the country and the presence in the managerial sphere of liberal traitors and hucksters.
  10. Dam
    Dam April 26 2016 09: 24
    0
    The US will destroy the stupidity of politicians and the mantra of exclusivity
  11. D. Dan
    D. Dan April 26 2016 22: 08
    +1
    It’s good to pray for oil and gas. It's time to learn with your own hands to do everything you need for life.
    And do not push the oil in millions of barrels for iPhones, foreign gear and other nishtyaki.
    And everyone should start living in a new way from himself ....
  12. masiya
    masiya 1 May 2016 17: 51
    0
    It is not oil that will destroy them, they themselves are beautifully rewarded with peace, either from a volcano, or from their own impudence on a global scale.