Join The Conversation With Mishpacha's Weekly Newsletter



Drowning in Oil

Alexander Duncan

There’s no doubt that $2.00 per gallon of gas might make you smile, but before you rejoice, remember that those low prices are the result of instability in energy markets and political turmoil unseen in decades. And it might get worse before it gets better.

Wednesday, February 17, 2016

The stock market is crashing, there’s talk of 99-cent-per-gallon gas, and oil — the commodity that was supposed to one day dry up and go the way of the Dodo bird — seems as plentiful as water. What got us to this point? And will things ever be the same? The simplest way to understand the great oil glut of 2015-2016 is supply and demand. There is simply more oil on the market than we can use. Global oil supply today is 97 million barrels per day (mb/d) but demand is 94.8 mb/d. Just to provide perspective, the difference is nearly all of Canada’s daily oil consumption. But that’s not the entire story. In addition to oversupply, three factors have collided to force prices to levels not seen in 12 years: the declining Chinese economy, an abundance of US oil, and a decision by the government of Saudi Arabia to keep pumping oil — even if it means losing money in the short term — to price out the competition. So while we’re all enjoying cheap gas, consider that it comes at a price. The stock market, which is highly sensitive to the oil market, has lost $1 trillion in just the last six weeks alone. Moreover, new oil producers in the United States that had seen a boom over the last few years are now facing bankruptcy. The loss of thousands of skilled jobs can’t be good for the American economy. Toss the highly flammable ingredient of geopolitics into this mix. Thanks to the nuclear deal negotiated by the White House, Iran has just entered the oil market again — much to the dislike of regional rival Saudi Arabia. So far, despite White House promises, it does not seem as though Iran is spending its “nuclear dividend” on the improvement of its citizenry, but on exporting its influence across the Middle East. 

To read the rest of this story, please buy this issue of Mishpacha or sign up for a weekly subscription

Share this page with a friend. Fill in the information below, and we'll email your friend a link to this page on your behalf.

Your name
Your email address
You friend's name
Your friend's email address
Please type the characters you see in the image into the box provided.
CAPTCHA
Message


MM217
 
The Fortunes of War
Rabbi Moshe Grylak We’re still feeling the fallout of the First World War
Some Lessons, But Few Portents
Yonoson Rosenblum What the midterms tell us about 2020
Vote of Confidence
Eyan Kobre Why I tuned in to the liberal radio station
5 out of 10
Rabbi Dovid Bashevkin Top 5 Moments of the Kinus
Day in the Life
Rachel Bachrach Chaim White of KC Kosher Co-op
When Less is More
Rabbi Ron Yitzchok Eisenman How a good edit enhances a manuscript
It’s My Job
Jacob L. Freedman “Will you force me to take meds?”
They’re Still Playing My Song?
Riki Goldstein Yitzy Bald’s Yerav Na
Yisroel Werdyger Can’t Stop Singing
Riki Goldstein Ahrele Samet’s Loi Luni
Double Chords of Hope
Riki Goldstein You never know how far your music can go
Will Dedi Have the Last Laugh?
Dovid N. Golding Dedi and Ding go way back
Battle of the Budge
Faigy Peritzman Using stubbornness to grow in ruchniyus
The Challenging Child
Sarah Chana Radcliffe Strategies for raising the difficult child
Bucking the Trend
Sara Eisemann If I skip sem, will I get a good shidduch?
The Musician: Part 1
D. Himy, M.S. CCC-SLP and Zivia Reischer "If she can't read she'll be handicapped for life!"