Great News: Oil Prices Are Falling
Investor’s Business Daily reports on some very good news on the oil front: “A barrel of oil has tumbled to $83, or 22% below its June high – unambiguously good news writ large for consumers, motorists and the U.S. economy overall, and a teachable moment if there ever was one. The U.S. imports about 3.5 billion barrels of oil a year. So a $20 reduction in price is equal to a $70 billion tax cut. And since we consume more than twice that much oil each year, the tax cut is closer to $150 billion. Gas prices at the pump are down 40 to 50 cents a gallon in some areas. Not bad. … [A big] factor is that Saudi Arabia is turning on the spigots. The Saudis aren’t stupid. They see the writing on the wall from the shale oil and gas drilling revolution in America. U.S. output is surging, with production double where it was just seven years ago. By pushing down the price, Saudi sheiks may be trying to drive out high-cost drillers to slow future production. … Another piece of very good news here is that the Saudis are crippling their former OPEC partners-in-crime. … The economic reality is that as the U.S. becomes more energy-dependent and can even reach energy dominance in the years to come, OPEC is becoming a toothless tiger. It can no longer hold the world hostage to high oil and gas prices. … Imagine how much the price would fall if we started building pipelines, repealed the ban on oil exports, drilled on public lands and didn’t have an EPA that irrationally views fossil fuel production as the devil’s work.” Drill, baby, drill.
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