Except for the countries like Russia, Saudi Arabia, Iran and Venezuela that depend on high oil prices to finance their governments and economies, this is definitely great news for the rest of the world's economies.
Since the U.S. is both an oil producer and a diversified economy with consumers keeping the 'plate' spinning for companies and government alike, we are the big gainers at OPEC's and Russia's expense. It couldn't happen to a better bunch of thugs.
We need a middle class tax cut, and we just got one with the falling price of oil. Now all we need is for the crazies in government who are blocking the Keystone Pipeline, the export of crude oil and discouraging a "Drill, Baby, Drill" response to OPEC and gang, to get out of the way and let the free market take care of the rest.
OPEC Holds Production Unchanged; Prices Fall has the continuing good news story about prospects for economic growth and consumer spending heading into the important Christmas selling season and beyond:
"The oil cartel OPEC decided on Thursday not to cut petroleum production, despite the plunge in prices in recent months that has indicated the diminishing clout of the organization.
On news of the decision by the Organization of the Petroleum Exporting Countries, the price of Brent crude oil, a global benchmark, fell an additional $4 to a four-year low of about $73. American crude dropped below $70, an even more significant threshold. . . .
Prices have come under pressure as global output of crude oil outstripped demand this year. Analysts forecast excess supplies of crude to continue to build in 2015.
The main new source of supply is oil extracted from shale in the United States, which is expected to add about one million barrels a day of oil production this year and an additional one million barrels a day in 2015.
OPEC seems at a loss about how to cope with this new source of competition and is also struggling to influence other big producers outside the organization like Russia and Brazil. Unable to come up with a strategy for handling these new developments, the cartel has decided not to intervene, evidently hoping that low prices will eventually curb production in the United States. . . .
Even though lower prices will hurt oil producers in the United States, the American economy will probably benefit as consumers have more money to spend and companies’ energy bills decline. Europe and Japan, both large oil importers, are also likely to get a boost from lower prices, although in Europe high taxes on energy limit gains for consumers.
Lower prices, on the other hand, could be very painful for OPEC producers, who depend heavily on oil revenue. . . .
Analysts say that Thursday’s announcement signals a radical change on the part of OPEC. Bhushan Bahree, an OPEC analyst at the market research IHS firm, called the announcement “a major tactical shift.”. . . Analysts say that at least some OPEC powers appear to have recognized that lower prices may prevail for a considerable time. In that situation, the organization needs to work on regaining market share. . . .
Analysts say the surge in supply from the United States poses particular challenges to OPEC because there is little the producers’ group can do but hope that lower prices will eventually discourage investment in drilling in the United States, thus reducing production.
The dynamic has shades of the early 1980s, when new crude supplies emerged from the North Sea, Alaska and Mexico, sending prices falling and squeezing OPEC’s market share."
If the U.S. government will stop blocking American oil companies, we will enjoy lower oil prices and a stronger economy in the coming years and decades.
The world is getting a taste of what increased supply means to prices as U.S. shale and other energy output is growing each day.
Why our government wants the bad guys to rule and the good guys to suffer is beyond my comprehension. Our political leaders are the 'stupid' ones.
Jonathan Gruber had it wrong concerning the stupidity of the American voter. It's our political 'leaders' who are the clueless ones.
And in time President Obama, Jonathan Gruber and the rest of their elitist and clueless cronies will be widely recognized as being wrong about the 'wonderful virtues' of big government mandated ObamaCare and other 'helpful' programs as well.
Capitalism, individual freedoms, free markets, competition and prosperity go together, regardless of what the 'stupid' politicians may want us to believe.
And lower oil prices are once again proving that simple point.
"Drill, Baby, Drill." That's my take.