What impact would a dramatic increase in the world price of oil have on the national economy?

Question

What impact would a dramatic increase in the world price of oil have on the national economy?

Answer 1

Well, we're about to find out, now aren't we?

*claps hands and waits patiently*

Answer 2

I am playing big on oil trading. I’m from Morgan Stanly, or Goldman & Sachs, or any big firms on the Wall Street .

I bought millions and millions of barrels of oil when they cost $60--$100 a barrel. I expect to make a kill when I sell. But right now it’s only $135 a barrel. So here is my difficulty No.1 :

Congress is now investigating on oil speculation, I am afraid of being caught.  But if I sell them right now, I would end up with little or no profit since the trading fees and hedge fund managing cost are not cheap.

I already request my agents send  the spin out to the media, like: “Oil future looks high, expecting to be in the range of $200 a barrel soon. ”   But it does not work price up as fast as I expected.

So my question is this:  How do I corner the market price up in time so not to get caught by Congress.?

For your info:   Prof. Michael Greenberger’s testimony before Senate makes me very nervous.  He said: ‘If speculation were reined in and trading rules tightened, the cost of crude oil could drop 25 percent.” http://www.mcclatchydc.com/staff/les_blu...

My lobby firm can work Republican party to stall passing the laws, but  I am not sure for how long. I am very fearful and worried. What are the options for me ? Please advise.

Answer 3

Oh gosh...it'd be awful.  Do you mean even higher than it is at this moment? Well...here is how things would be then-

People's budgets would suffer.  They'd definitely cut back from using cars as MUCH as possible.  They'd really invest in alternate energy and public transportation would skyrocket (a lot more than it is right now, which I need to say has increased a lot over the last few years).  You'd see a lot more people riding bikes.  People would feel the strain and there'd be less demand.

Also, other bad effects would occur too.  The price of food would shoot up.  People would only buy what they need.  We'd be in a bad state.

That'd be awful if gas prices shot up a lot..like $3 or $5 more a gallon..ugh.

I doubt it would happen though.  I don't think so.

However, I'm afraid the government could take the wrong measures during these harmful times.

They might..

try to control the price of energy and oil.  that wouldn't be good.  Demand for gas would be so high that (thanks to low prices demand would be high) there wouldn't be enough gas for everyone.  There wouldn't be benefit, producers would struggle to give enough oil, and there'd be long lines.  A smarter solution would be to tax those oil companies.  They make a lot of profit.  Its time we taxed their profit instead of them getting breaks!

Other nice solutions would be to give incentives for companies to develop efficient technology (clean), invest in alternate energy, work with businesses form a private-public partnership in doing so, and call for more oil to be produced.

In addition, the gov could also help those in the middle class and poor.  Give large tax breaks to them to help deal with such a problem.

Let me just say that such moves should be taken now, but if there is a huge increase in gas prices, then they will be taken for sure.  Just that right now, they aren't high enough and there's too much bickering.

Am I saying that I WANT higher prices? NOOO

I want the govt to invest in alternate energy and provide credits and/or other incentives for companies to work for cleaner, renewable energy.  I also think that more oil needs to be produced.

Sorry, I got caught up in my response. hehe..sorry.

Answer 4

I am playing big on oil trading. I’m from Morgan Stanly, or Goldman & Sachs, or any big firms on the Wall Street.

I bought millions and millions of barrels of oil when they cost $60--$100 a barrel. I expect to make a kill when I sell. But right now it’s only $135 a barrel. (Please tell nobody:  one day on Jan. Goldman & Sachs traded a volume of barrels = US one years import in volume)

So here is my difficulty:

Congress is now investigating on oil speculation, I am afraid of being caught.  But if I sell them right now, I would end up with little or no profit since the trading fees and hedge fund managing cost are not cheap.

I already request my agents send  the spin out to the media, like: “Oil future looks high, expecting to be in the range of $200 a barrel soon. ”   But it does not work price up as fast as I expected.

So my question is this:  How do I corner the market price up in time so not to get caught by Congress.?

For your info:   Prof. Michael Greenberger’s testimony before Senate makes me very nervous.  He said: ‘If speculation were reined in and trading rules tightened, the cost of crude oil could drop 25 percent.” http://www.mcclatchydc.com/staff/les_blu...

My lobby firm can work Republican party to stall passing the laws, but I am not sure for how long. I am very fearful and worried. What are the options for me ? Please advise.

Answer 5

Oh Lord, the economy would tank.  Well it depends on the price, up to 200 dollars a barrel it would probably go down, but survive.  Anything more than that, and we have a major problem.

Answer 6

Half of our money paid at pump goes to Wall Street speculators. And we can not hear or read main media reporting them. We are kept in the dark

“Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.”

http://www.marketwatch.com/news/story/ga...

Answer 7

Wouldn't make a difference at all if we weren't dependant on oil. If we used various othe alternatives and oil too. It would then have a little impact. I do think though that the price will eventually come down. People are beginning to want to use other energy sources. They (the oil countries) also know the price of oil can't infinitely rise and not affect their profits. They will at some point have to produce more oil or lose all of their profits. It is already having an effect on the economy in a negative way all around the world.

Answer 8

here is wha would happen

the government would make a bunch of money real fast then people will stop buying cuz gas-less cars will b the new craze

the end