If there’s anything that was news worthy in oil this week it was quickly lost in the quick quotes of Donald Trump's debate. Here’s the thing, the GOP debate likened to crude oil: nobody cares as long as America wins. So many have been trying so hard to call the “oil glut” a crisis when it’s just the opposite.
Right now America is where it wanted to be for so long; stability, supply and cheap fuel. Why all the fuss? Oh, I see, all of a sudden we have a bleeding heart for oil producers that will have to shut down because they aren’t making any money. Right and America is dying for another season of Honey Boo Boo. Remember the days when Big Oil was the most revered industry in the world. I still have a picture of an oil covered baby duckling on my website in case you may have forgotten. What about our “addiction to oil”?
Now, let’s have a moment of silence for my beloved $100 per barrel oil. It’s gone and probably not coming back until Saudi Arabia joins Greenpeace. Well O.K., let’s be more realistic. The fact is that the world has to get back to being the well oiled (ugh) machine that it once was. We have to see GDP in the United States at or above 3%. We need to see China knocking on double digit growth and finally, we need the European Union to at least get something close to 2%.
Yeah, you can stop laughing now. As it might only seem like a dream to get back to that state of nirvana, that’s the reality of $100 oil. For now, we’re going to have to find a balance between what we have, what they have and what everyone wants to consume.
There will be blood. We’re going to see the loss of wealth trickle down to everyone from the labor helping produce the oil and gas to the people collecting shrinking royalties. Conversely, there will be “oil-flation, but not in the big picture, but at the street level. This loss of wealth at the labor level s going to sting, as well as those that we’re pulling income from royalties in far off the map places. In turn we’ll see oil prices edge higher as our production increases and the possibility is that we won’t see production as eager to come back online as once thought.