Thursday, February 11, 2016

Oil disaster

The price of oil dropped to $26 a barrel today. I remember predicting a few months ago that the price of oil would drop below $40 a barrel and that would be horrible for the economy. Here we are at $26 a barrel and it is a total disaster. Oil related businesses are starting to lay off well paid workers by the thousands. Many of the businesses are in financial crisis and I'm sure we will see a whole slew of bankruptcies and the near future. Unfortunately oil may go even lower. There are reports that storage facilities are just about full and they might have to turn any new oil from their facilities. If and when that happens oil will drop even further. Are we ready for oil to be lower than $20 a barrel? I personally like paying less for gasoline. But, I do not like seeing the destruction of one of the most productive sectors of our economy. This drop in price is going to have negative ramifications for many years to come. if you are in any way involved in the oil industry buckle up it's going to be a bumpy ride. Actually I think that is the wrong analogy. I actually think the oil industry is like the Titanic on a collision course with an iceberg.

What do you think?