Falling Oil Prices May Be a Bonus For Consumers
Unfortunately, it is not necessarily a bonus for businesses associated with extracting oil and natural gas or constructing the pipelines to move those commodities. For producers, cheaper prices mean either less profits or even losses, which leads to a slower national economic expansion.
The Economics of Lower Oil Prices
Right now oil supplies are exceeding demand and causing commodity prices to fall. At the point in time prices dip below the point to where producers might profit, they will most likely stop drilling, stop hiring, or even start laying workers off. These actions will eventually start a chain of events leading to less production, less of a need for shipping and moving commodities – all of which affect the businesses MyMarineTracker serves. It’s just economics 101.
What Are the Predictions For Crude Oil Prices?
The economic and political curves won’t immediately intersect.
The good news is the majority of ‘experts’ predict that crude oil prices will rise gradually over the balance of 2015 and beyond. It is doubtful that they will fully recover to their previous highs, but $70-80 per barrel would make most oil-related companies get back in the black and operate in more of a business-as-usual fashion.
Businesses that ‘saved for a rainy day’ will reap savings in the purchase of replacement capital equipment at this time. Contacting MyMarineTracker now to source equipment for your next repair or replacement project could benefit your company!