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Lubbock, Texas | the slide down of oil prices will not lower gas prices as much as the run up raised gas prices for the simple fact that we have a shortage of refining capacity in this country
and even if all the oil in the world pours in there is still only so much that the USA can refine.....so there is a shortage of refined products......we have not built refineries, but we have built ethanol plants and those are producing refined products to help meet oxygenate demands and to help fill in slightly with the refined products shortage that exist regardless of the supply of crude oil
the US economy has as much a psychological factor to it as it has ever had.....we had to hear the media the entire run up of crude and gas prices tell us how the economy was going to be ruined by gas prices.....we know they will not report the opposite when gas prices dip slightly because crude goes down, but the American people will know.....and with the 50 cent a gallon credit ethanol should be ok with lower gas prices
the vast majority of the world does not get rich off of high oil it pays more.....so a cut in oil and gas cost for them is a boost in buying power....probably a greater boost than here in the USA.....so while demand may go down a bit cost should go down further.....if commodities go down I do not see the slide AT talks about....I would see a slow slide to still a nice price
and there well could be an up price if oil drops far enough.....other countries are not as constrained for refined products and a drop in crude could lower their refined products cost more than here in the USA....and again more free cash for American AG products....especially with a lower dollar making AG competitive
easing energy cost could temper world inflation which gives the USA some breathing room | |
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OIL DROP!!!
