Why is cheap oil prices negative to the economy

[Amatrue]

Why is the world concerned about cheap oil prices affecting the economy? Wouldn't cheaper oil prices be beneficial for the economy? Or is this related to oil nations unable to produce oil at a low price therefore strangling the supply of oil?

 

[clacy]

For net exporters like the US, Russia, etc it’s a bad thing.


Also, if prices stay long for much longer, oil companies will go bankrupt left and right. Then oil will skyrocket when the economy resumes and there’s no production.

 

[ZBZB]

The ruling class narrative has changed from it being good to bad now that US is the largest producer.

 

[Atikon]

Because every price is determined by Supply and Demand. Why is there less demand for oil, because Companies don't need it to produce stuff, why aren't they producing stuff? Because ppl aren't buying. Normally the S&P should be down, but it seems that that's already priced in as of now/the market sees an end to this

 

[cdcaveman]

don't freak out, oil storage glut.. no where for it to go.. they are paying people to take it.. you shouldn't be anymore alarmed them you were before... its a good sign that if oil producers have no idea they are going to have to pay people to take their oil because no one is using it and there is no storage , that the rest of the world is whistling in the dark as well

 

[smallfil]

Let us get real. We live in a consumption economy, most countries do. So, if there is little to no demand for oil like now with the lockdowns, economic activity is close to zero and businesses have no income coming in and laying off employees to survive if at all. So, people stopped driving too, going out to restaurants, etc. So, oil as an indicator of economic activity has its merit. That said, this is a temporary situation. At some point, economies of the world will open up and demand for oil will go up again. People will drive again consuming lots of oil in addition to factories ramping up production to meet their demand. Oil is going up from here. The huge cuts in oil production as well as higher consumption coming in a couple of months will see to that.

 

[ironchef]

China, Japan, India... all the oil consuming nations are laughing all the way to the bank. Now we have to pay them to buy our oil?

 

[Girija]

Fed will start buy in this too, relax everyone....

 

[1957may10]

Why is the world concerned about cheap oil prices affecting the economy? Wouldn't cheaper oil prices be beneficial for the economy? Or is this related to oil nations unable to produce oil at a low price therefore strangling the supply of oil?

At this point to dispose the oil because over produced is very expensive. You can not shut off regular oil pipes, but fracking one you can. I am wondering why it suddenly came in, did we know it in advance and can not regulate it. It may come on as natural disaster. Some may dispose it in Mother Nature places. So strange... To me it is like action...

 

[Bobbybax]

Fed will start buy in this too, relax everyone....

Supposedly the Eccles building has a huge basement.