SQUACKEE wrote: lonewolf wrote:
Bad News#2: Well head price of crude oil has dropped from $147/bbl to $70/bbl.
And why is this bad news?
Well, bad news for me: My income is down over 50%. While I may save $40-$50 month at the retail gasoline pump, I lose many thousands in income. Income that is derived from investing at $150/bbl expenses and operating costs which must be recovered from $70/bbl oil.
Actually, "cheap" oil is not necessarily good for even those outside the oil industry. It is all one big domino game. Massive layoffs in the oilbiz will affect jobs and spending in other facets of the economy. Reduction in capital spending will result in less production and less taxes at both corporate and individual level.
It is short sighted to groan over "obscene" profits in the oil industry when they are actually far less than the ROI in many other industries. Most people outside the industry have no comprehension of the humongous amount of capital required to acquire leases, perform exploratory surveys, conduct seismic, drill wells (of which are 90% wildcats are dry holes) and develop production and transportation facillities. The fact that Company X made $ Y profit is meaningless and irrelevant.
And, BTW, chances are part of your managed 401 K is invested in oil.
I could go on but suffice it to say, I took little solace at filling up a $2.17/gallon this morning