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Barry Ritholtz: What Do Falling Oil Prices Mean For The U.S. In The Short And Long Term?
FYI: Since early 2014, the price of oil has plummeted. It peaked last year at $105 a barrel and is now about $50.
The consumption and production of energy is a major component of the global economy. The huge drop in price has a significant impact in the United States — on corporate profits, employment and capital spending. Still, there has been a lot of misinformation — scare-mongering, really — about falling oil prices. A little context here can go a long way Regards, Ted http://www.washingtonpost.com/business/get-there/2015/02/13/018153be-b26e-11e4-886b-c22184f27c35_story.html
While one might save at the pump, don't expect to see airline fuel surcharges, package delivery charges, cab rides, electrical bills or your heating and cooling costs going down anytime soon. My guess is that if you don't need to fill up a machine that requires oil derived fuel in any form the drop in oil prices will mean squat to you.
No one talks about coal... cheap, plentiful coal. Interesting table below points out that cheap oil has not made a dent in replacing coal for U.S. electricity production.
Our consumption of residential electricity continues to grow...most of this is still powered by coal (red line in chart below):
Both residential and commercial use of petroleum is down:
This link gives lots more interesting chart options (use annual data setting): eia.gov/beta
Much of the petroleum we export is in the form of petroleum products. This sector should be a beneficiary of cheap oil. I also think refinery workers realize there are big profits ahead and want a piece of the action.
@Bee - very interesting charts, not what I would have expected. I wonder why the Electric power sector energy consumption table was constructed to only include the months from Jan-Aug and not just a whole years worth of use. It is also interesting to note in that table that while the use of coal has increased over that time span the use of natural gas has decreased despite all we hear about the conversions of coal-fired generating plants to natural gas usage. Maybe the volumes just haven't kicked in yet OR maybe the converted plants are not located in high output areas as measured by BTU consumption and use. Hmmm....
It was also interesting to me to see the upticks in solar and wind energy production. I've got some research to do
Comments
Our consumption of residential electricity continues to grow...most of this is still powered by coal (red line in chart below):
Both residential and commercial use of petroleum is down:
This link gives lots more interesting chart options (use annual data setting):
eia.gov/beta
Any thoughts on funds such as FSCHX?
Here's a list:
source:
eia.gov/tools/faqs/faq.cfm?id=41&t=6
It was also interesting to me to see the upticks in solar and wind energy production. I've got some research to do