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.

What’s in a Name?
Shoshana Friedman “What does Writer X have to say this week?”
Atonement — Fake and Real
Yonoson Rosenblum White confessionals and faux rituals
Four Walls Coming Full Circle
Eytan Kobre All the while, there’s been a relationship in the offing...
And Yet We Smile
Yisroel Besser We are the nation that toils to be happy at all costs
Out of This World
Rabbi Henoch Plotnick Dirshu Hashem b’himatzo — we are in Hashem’s company now...
Steven and Jonathan Litton
Rachel Bachrach The co-owners of Litton Sukkah, based in Lawrence, NY
Tali Messing
Moe Mernick Tali Messing, engineering manager at Facebook Tel Aviv
Sick Note
Jacob L. Freedman “Of course, Dr. Freedman. Machul, machul, machul”
Avoiding Health Columns Can Be Good for You
Rabbi Emanuel Feldman Only one reliable guide for good health: our Torah
Endnote: Side Notes
Riki Goldstein Most Jewish music industry entertainers have side profes...
Me, Myself, and Why
Faigy Peritzman Where there’s no heart and no love, there’s no point
Can’t Do It Without You
Sarah Chana Radcliffe When you step up to the plate, you build your home team
Eternal Joy
Mrs. Elana Moskowitz The joy of Succos is the fruit of spiritual victory
The Appraiser: Part III
D. Himy, M.S. CCC-SLP and Zivia Reischer Make sure your child knows his strengths
Hidden Special Needs
Rena Shechter You won’t see his special needs, but don’t deny them
Dear Wealthy Friend
Anonymous There’s no need for guilt. I am truly happy for you