Europe, And The Price Of Oil.

One good thing about Europe’s financial disaster is we should see lower prices at the pump in the near future.

Oil traded below $80 a barrel for a fourth day amid speculation that another meeting of European leaders this week will fail to halt the debt crisis that threatens to slow the economy, and curb fuel demand.

Chancellor Angela Merkel hardened her resistance to sharing euro-area debt to resolve the region’s financial crisis, while Moody’s Investors Service severely cut the ratings of 28 Spanish banks to essentially junk bond status.

“The ongoing problems in Europe continue to push down expected future crude oil consumption,” Mike Sander, an investment adviser at Sander Capital Advisors in Seattle, said in an e-mailed note today. A “macro-economic picture of slower global growth” is weighing on prices, he said.

Yeah, when countries are engulfed in deep economic depressions, it is kinda hard for everyday Joes and Janes to think about spending money for road trips, unless they happen to be fleeing their country. And, it’s summer, so no one needs any heating oil.

Some Persian Gulf members of the Organization of Petroleum Exporting Countries may trim exports if Brent crude stays within a range of $80 to $90 a barrel. So, in spite of falling demand, OPEC intends to hold price points (inventory) about where they are. Poor guys. You might want to stop building skyscrapers in Dubai, for a few months anyway. This Euro thing could get really ugly. And, I hear China might be cutting back on growth. Remember that scene in Syriana, where Matt Damon’s character chats with the Arab leader about oil economics?

http://www.youtube.com/watch?v=AwQKhvweL2A&feature=relate

War is Hell. Not in any way to celebrate the Global crisis, it doesn’t bother me that here in the U.S., we could see $3 gas again as early as July.

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About Steve King

iPeopleFINANCE™ Chief Operating Officer. Former CEO of Endymion Systems, Inc. a $36m Information Systems Services company. Co-founder of the Cambridge Systems Group, the creator of ACF2, the leading IBM Mainframe Data Center Security product; acquired by Computer Associates. IBM, seeCommerce, marchFIRST, Connectandsell alumni. UC Berkeley alumni. View all posts by Steve King

4 responses to “Europe, And The Price Of Oil.

  • everythinghk

    At the moment lower oil prices are a strong signal of a deflationary period the world is heading into, which may be signaling a world wide recession.

    I’m not 100% sure that if gas prices fell to $2.50 or $1.95/gallon that it would positively impact the US economy in a positive way since so many other fundamentals are broken in our system.

    I would rather see $4/gallon gas and a growing economy than $2 gas and another recession.

    HK

    • Steve King

      I agree with both sentiments, however whether we get a summer respite or not, the global economy is headed into a major recession, and oil is only one small factor. Might as well enjoy $3.25/gal gas for a couple of months, no?

      • everythinghk

        I’m 99% sure we’ll be enjoying it at $2.90 as it is $3.14 here now in Orlando. For anybody that knows anything about economics (which I’m 99% sure you do), the economic indicators point towards a global train wreck or a World War. Better buy your farmland now.

        HK

      • Steve King

        HA! Drive out to California … we’re down to $4.09 yesterday.

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