Oil < $50 a Barrel. The Dirty Spekulant thread

[EternalOptimist]

Energy intensive industries are looking good. I think the oil price will stay low for at least 9 - 12 months, till OPEC reduce supply. The Saudis are playing some sort of long game, I don't know what or why.
Steel, Aluminium, Refineries themselves, haulage

what about containers ? with China slowing dramatically, shipping will suffer, buy into containers cheap, then cheap oil will stimulate China, containers will rocket and you make a killing (containers are not like ships, they have much more attrition)

[scooterscot]

Why would we think cheap oil would stimulate when demand falters?

Deflation is raising its (for many) ugly head. Cheap oil might suggest people (and companies alike) take advantage and spend but in reality they do the opposite. They hold off thinking cheaper days will come. Now think who benefits from this? Come on class, it's not difficult. Think about the companies, that are already heavily in debt, but whose services are in demand.

[DimPrawn]

Think about the companies, that are already heavily in debt, but whose services are in demand.

IT Contractors?

[DannyF1966]

Think about the companies, that are already heavily in debt, but whose services are in demand.

Spotify.... Instagram... Pinterest... etc....

[scooterscot]

IT Contractors?

Speak for yourself

[eek]

oil is a form of rent (in its pure economic definition). As such its a potential stimulant to the entire economy provided people spend the money saved rather than saving it.

The fall in oil price will probably result in deflation of 1% across the entire economy which with no other inflationary pressures is going to result in actual deflation (and that is a big problem as it encourages saving rather than immediate consumption).

[scooterscot]

Spotify.... Instagram... Pinterest... etc....

Think about services we can't do without.

[DannyF1966]

Deflation is raising its (for many) ugly head. Cheap oil might suggest people (and companies alike) take advantage and spend but in reality they do the opposite. They hold off thinking cheaper days will come.

You're changing the topic here. One minute you're talking about cheap prices, and now you're talking about falling prices. I've been following, or trying to follow, this thread thinking that cheap means already bottomed out.

[Tasslehoff]

Why would we think cheap oil would stimulate when demand falters?

Deflation is raising its (for many) ugly head. Cheap oil might suggest people (and companies alike) take advantage and spend but in reality they do the opposite. They hold off thinking cheaper days will come. Now think who benefits from this? Come on class, it's not difficult. Think about the companies, that are already heavily in debt, but whose services are in demand.

Voodoo.... Economics?

[scooterscot]

The fall in oil price will probably result in deflation of 1% across the entire economy

Now we're cooking. I'd say 1%+ and then some. Look at Germany, already in deflation before the drop in oil prices.