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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

November 28, 2014 at 10:40 AM

Vote: Cheaper oil and you

As the chart shows, relatively cheaper oil prices eventually filter down to the pump:

GASfredgraph

But the industrialized world runs on petroleum, so the effects of relatively less expensive prices will eventually be felt everywhere. What’s not to like, aside from the danger of increased burning of fossil fuels causes planetary disaster? (Oh, that…)

For one thing, the relative collapse in oil prices (Brent was at $125 a barrel in the spring of 2012; today it is trading around $73) is partly tied to increased production in the United States, but also to falling demand.

Economic conditions are poor in Europe, Japan and many developing nations. China is slowing. Also, even though the United States is doing better by comparison, wages are stagnant or falling for most workers.

Commodity prices in general are down. Deflation is a serious concern. So with cheaper oil one economic actor’s win can mean a loss for another, or a long-term loss for everyone.

How is cheaper oil affecting you?


This Week’s Links:

OPEC’s ‘very aggressive test’ for U.S. shale | Naked Capitalism

Oil crash will see drillers cut spending to shield dividends | Bloomberg

Wal-Mart is seeing its biggest Black Friday protests yet today | Mother Jones

The future of Wi-Fi could run through old TV infrastructure | CityLab

Eleven economic lessons to make you a smarter shopper on Black Friday | The Atlantic

Sociopaths.com: Silicon Valley’s slippery slope | NY Times

Obamacare: confusion in high places | Dean Baker


 

Today’s Econ Haiku:

As you shop and drop

Don’t forget local retail

Push it in the black


I invite you to follow me on Twitter, @jontalton


 

 

Comments | More in Oil prices | Topics: Friday poll, Oil prices

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