GREY:WFREF - Post by User
Comment by
Khersonon Dec 12, 2014 9:33pm
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Post# 23226641
RE:RE:Opec, Russia and the U.S.
RE:RE:Opec, Russia and the U.S.JohnJBond wrote: Agreed, the bigger the stress, the greater the reaction.
In my view, the biggest problem caused by a rapid decline in oil prices is the damage to the economy caused by the high oil prices that follow.
The bigger the fall in oil prices, the bigger the increase in oil prices once the resultant supply cuts hit the market.
Last time oil got to $149 ish a barrel. How high will it get next time? Will it break $200? Whatever it hits will cause real economic stress.
Wipsawing oil prices is much like wipsawing interest rates. Neither is good for the economy. Governments work hard to keep interest rates from experiencing rapid movements. There is every reason to believe governments are now working on to reduce oil price swings.
Points well presented. I think we will see some U.S. government backed intervention in January. The oil industry is too important to allow it to be stressed for too long...
Kherson