But higher oil prices in itself are inflationary. Most goods need to be transported. So higher transportation costs will increase the cost of most goods.
True, but high oil prices also have a shutdown effect. If gas is $10, leisure travel will be curtailed and people will stay home a great deal more. Funds that were being spent on nights out will now go to groceries. Those supply issues will be less so if people aren't buying as many things.
The only people out in public will drive Teslas
Killer Trade!I'm so glad I loaded up on SPY & BTF puts...
Power plants in the US generating electricity in the US also, run on oil. If electricity prices go up, those free charging stations, would start charging fees to electric cars wanting a charge.
Roughly 70% of petroleum-fired electric generating capacity that still exists today was constructed prior to 1980. Utility-scale generators that reported petroleum as their primary fuel comprised only 3% of total electric generating capacity at the end of 2016 and produced less than 1% of total electricity generation during 2016.Power plants in the US generating electricity in the US also, run on oil. If electricity prices go up, those free charging stations, would start charging fees to electric cars wanting a charge.
Fortunately, only a small amount of power plants use oil. Most of the generation is via natural gas. Surprised that only 2.3% is solar. For all the tax credits and govt money (Solyndra) funneled into green energy, the payoff is quite small. For green, Nuclear seems to make the most sense if hydroelectric is not an option.
- Natural gas (40.3%)
- Nuclear (19.7%)
- Coal (19.3%)
- Wind (8.4%)
- Hydro (7.3%)
- Solar (2.3%)
- Biomass (1.4%)
- Petroleum (0.4%)
That's what I mean. If we have $200 oil the Fed can't raise rates as easily. Part of raising rates is cooling the economy. $200 oil will have that effect.