Big Oil has done it again—fooled American consumers with their whining. Remember three to four years ago when gas prices shot up to as much as $4 per gallon? Big Oil said the cost of fracking was so high that they couldn’t make a profit for a penny less than $90 a barrel. “Not true,” say the experts. Read about the real figures.
Now that the US economy is on the upswing, we’re telling Europe and Japan to do their part to improve growth—an interesting exchange of positions.
On the domestic side, it appears that all the money consumers are saving at the gas pumps is going to retailers in the great bargain hunts on Black Friday and Cyber Monday. Let’s see which side won.
Despite all the naysayers of the past six years, statistics show that the robust US economy is on a fast track as it climbs through the third quarter, easily passing all forecasts.
American Fracking Not Hurt by Plummeting Oil Prices
A Fortune article by Brian Dumaine reveals the truth about plummeting oil prices and the cost of fracking. Jim Burkhard, the head of oil market research at IHS, a highly respected research firm in the industry said: “There’s a spectrum of break-even costs. Wells can perform differently in the same field.” A new study by IHS concludes that about 80% of the tight oil estimated to be pumped next year will still be profitable at between $50 and $69 a barrel. This means the fracking industry can continue to pump oil using 8 out of 10 wells and make a profit selling at well below $90 a barrel. Where have all those profits been going for the last few years?
U.S. Wants Europe and Japan to Do Their Part to Promote Growth
U.S. Treasury Undersecretary Nathan Sheets said that Europe and Japan need to play a bigger role in bolstering the disappointing global recovery, according to a Bloomberg report by Andrew Mayeda and Jeanna Smialek.
“Although we are seeing a strengthening recovery in the US, the overall performance of the global economy continues to fall short of aspirations,” Sheets said in a recent speech.
Treasury Secretary Jacob J. Lew singled out Germany and the Netherlands as countries with room to boost their economies through fiscal measures and said Japan needs to “move proactively and decisively” to aid expansion.
America’s Robust Interest in Online Shopping Increases by 16%
Bricks and sticks retail store traffic was down about 5% over the Thanksgiving holiday weekend, while online sales increased by 17%. November online sales reflected a 16% increase over last year.
According to a CNN article on the matter, consumers are making fewer visits to stores in favor of the convenience of ordering online. Nonetheless, retailers are fighting tooth and nail with programs to lure customers back into the stores.
Plunging Oil Prices Effects Consumers and Global Economy
According to a Steven Mufson article in the Washington Post, tumbling oil prices are draining hundreds of billions of dollars from the war chests of oil-rich exporters and oil companies. The falling prices give a real boost to ailing economies in Europe and Japan that have been energy poor for the past few years due to the high cost of crude. American consumers are enjoying the relief at the start of the holiday shopping season.
Not that movers and shakers in the oil industry are dismantling their palaces and auctioning off their Bentleys and Rolls Royces. They still have plenty to eek out a modest luxurious lifestyle. However, the result of the oil bubble could initiate one of the biggest transfers of wealth in history and reshape the oligarchy.
Third Quarter U.S. Economy—Full Speed Ahead
USA Today reporter Paul Davidson in a recent article said that the U.S. economy grew more rapidly than expected in the third quarter, foreshadowing a projected pickup in the recovery next year. That is a very big deal.
The report went on to say that gross domestic product expanded at a seasonally adjusted annual rate of 3.5% in the three months ended Sept. 30, according to the Commerce Department. The median forecast from Action Economics’ survey said that economists expected 3% growth.