Reply to thread

Message

<blockquote data-quote="Morsi" data-source="post: 1536297" data-attributes="member: 56840">I actually agree with this analysis. In the short more oil production means lower prices which means consumers will have a direct benefit at the pump. It also helps out the economy as more and more consumers will have more money to spend. The long term effects however are a bit more complex. Keep in mind that low gas prices are exactly why projects like the Keystone pipeline are starting to become unprofitable. If the the low prices trend continues this will probably have a negative effect on states that depend on the oil industry (Texas, S.Dakota Alaska etc) and this will definitely have a negative impact on the U.S economy as a whole.The trillion dollar question is will increased consumer spending be enough to offset the negative effects of decreased oil production? Impossible to accurately predict since there are so many variables involved. In the short term it has provided a much needed boost to the economy. In the long term however, it might actually hurt the economy considering lower gas prices has already contributed to rate of deflation which is not a good thing right now considering our current rate of inflation is already way below the 2% mark that the fed is trying to get to back too.Only time will tell. For now the oil market is too volatile. IF the market ever stabilizes we&#039;ll have a better picture then.</blockquote>

[QUOTE="Morsi, post: 1536297, member: 56840"] I actually agree with this analysis. In the short more oil production means lower prices which means consumers will have a direct benefit at the pump. It also helps out the economy as more and more consumers will have more money to spend. The long term effects however are a bit more complex. Keep in mind that low gas prices are exactly why projects like the Keystone pipeline are starting to become unprofitable. If the the low prices trend continues this will probably have a negative effect on states that depend on the oil industry (Texas, S.Dakota Alaska etc) and this will definitely have a negative impact on the U.S economy as a whole. The trillion dollar question is will increased consumer spending be enough to offset the negative effects of decreased oil production? Impossible to accurately predict since there are so many variables involved. In the short term it has provided a much needed boost to the economy. In the long term however, it might actually hurt the economy considering lower gas prices has already contributed to rate of deflation which is not a good thing right now considering our current rate of inflation is already way below the 2% mark that the fed is trying to get to back too. Only time will tell. For now the oil market is too volatile. IF the market ever stabilizes we'll have a better picture then. [/QUOTE]

Verification