
Oil Crash is Kicking Off One of the Largest Wealth Transfers in History - walterbell
http://www.bloomberg.com/news/articles/2016-02-01/bofa-the-oil-crash-is-kicking-off-one-of-the-largest-wealth-transfers-in-human-history
======
roymurdock
1\. Calling a reduction in oil spending a "transfer of wealth" is confusing
and clickbaity. In economic terms, a transfer is a redistribution of income
that _is made without the exchange of any goods or services_. We do not call a
drop in the price of computers a "transfer of wealth," we call it a price cut.

2\. While oil has a EDIT:LOW elasticity of demand (people need to drive to
work and heat their houses), I've never bought the argument that cheap oil has
a significant effect on car sales, especially in saturated developed markets.
Who decides to make a $20k, 5-10 year investment based on something as
volatile as oil prices? Car sales are driven mainly by income growth,
marketing, and social pressures.

3\. Who is going to buy more oil because it has become cheaper? The plastics
manufacturing industry might shift their recycled/new mix towards new as it is
now relatively cheaper, but aggregate demand for oil would still be the same.

The article does a poor job of explaining oil market dynamics and is little
more than unfounded speculation with a misleading graph and a few numbers
thrown in.

~~~
jonknee
> I've never bought the argument that cheap oil has a significant effect on
> car sales, especially in saturated developed markets.

If you look at the sales figures it is quite obvious that you're not in the
majority here. It's a little tricky to model because cars are all getting
better mileage every year, but when gas is expensive gas guzzlers definitely
experience a dip in sales (and vice versa).

[http://li.dyson.cornell.edu/pdf/AEJ_2009.pdf](http://li.dyson.cornell.edu/pdf/AEJ_2009.pdf)

~~~
gregpilling
I agree. I sell truck accessories. Yes, it does have a significant effect.
People really are that short sighted.

~~~
gsibble
Never underestimate the stupidity of people.

------
sveme
The shortsightedness of this article (and I guess business analysts in
general) is breathtaking. Isolated, it might be positive for consumers, but
any increase in the consumption of oil due to low prices should be feared.
Celebrating Chinese buying more SUVs, the worst automotive fashion in the last
two decades? Yeah, great.

We'll pay for these short term wealth transfers with a further uptick in
warming and a huge shock in the future when no one's saving energy any more,
renewable energy installations have come to a standstill and oil rapidly
becomes more expensive again.

~~~
oniMaker
If you are convinced of the latter point, then it's a great opportunity for
you to invest in oil and benefit from your own wealth transfer.

~~~
plusbryan
What's the best way to capitalize on this assumption? USO?

~~~
AstroJetson
I always suggest Vanguard funds - Vanguard Energy Fund Investor Shares:

[https://personal.vanguard.com/us/funds/snapshot?FundId=0051&...](https://personal.vanguard.com/us/funds/snapshot?FundId=0051&FundIntExt=INT)

Note that this is SUPER RISKY investment fund. If you look at the chart it has
major swings up and down. The fund is down 20% for 2016 (yikes!). But if you
had held it from 2012 -> 2014 you would have gotten a 40% return on your
investment.

I like Vanguard funds since they have a low management cost to them and they
tend to be a little more conservative in their selection.

Good luck, remember me when you make your million!

~~~
tamana
>Good luck, remember me when you make your million!

Oldest trick in the book: fove out free advice and take a share of the wins,
but don't pay a share of the losses ;-)

~~~
AstroJetson
No, the oldest is to give out free advise, get a commission on the buy and
then win or loose get a commission on sale.

That's the key underpinning to the stock market. Just ask any broker.

------
mcguire
I'm really having a hard time with the current market conditions. Ok, so the
Saudis are acting to stop fracking, oil-shale exploitation and all of the
other increases in production from non-OPEC countries. Again. Yay.

I get that low oil prices mean bad days for energy companies, many "emerging"
countries, and the financial markets, to whom any news is bad news.

But in the "developed" countries, this makes literally _everything_ else
cheaper. In the short and medium term, yay. And when the Saudis have made
their point, they'll drop production, prices will go back up, everything will
return to normal, more or less.

So why is everyone worried?

~~~
crpatino
The problem with that reasoning is that there's no fundamental law of nature
that dictactes what "normal" means; instead there is a complex network of
interrelated forces that is itself kind of resilient but whose individual
states are very fragile. Under those conditions, it is practically imposible
to "go back" after having disrupted the status quo.

On the one hand, there is such thing as supply destruction, oil producers that
are marginally profitable and that go out of business if price collapses,
taking tons of hard capital (not financial, but equipment, personnel know how,
etc). The Saudis are pressumably aware of this and very much doing it on
purpose.

The problem is that there also exist demand destruction. Companies that
consume energy in large quantities to produce economically useful but
expensive goods and services. This guys conversely go out of business when oil
price spikes (there was some statistic going around in 2008 about how 5 out of
the last 6 recesions in the US where correlated with high energy prices),
which is the intended effect of Saudi strategy.

So, eventually, when the noise signal introduced in oil prices gets absorbed
by the market negative feedback loops, the economy we go back to will likely
be smaller than the economy we started with. We could debate wether this is a
good thing or a bad thing, but many actors are nervous because this is a game
of musical chairs, and very few can say they will have a guarrantied place at
the table by the time the rubble stops bouncing.

~~~
a3n
> On the one hand, there is such thing as supply destruction, oil producers
> that are marginally profitable and that go out of business if price
> collapses, taking tons of hard capital (not financial, but equipment,
> personnel know how, etc). The Saudis are pressumably aware of this and very
> much doing it on purpose.

Doesn't that equipment get sold? If not immediately, then eventually, modulo
the odd pipe that gets bent or rusted in storage.

And those people are largely available for the jobs they're experienced at
when jobs are available, so they aren't "destroyed" either, they're just
idled. Some will move on, some won't.

~~~
AnthonyMouse
> Doesn't that equipment get sold? If not immediately, then eventually, modulo
> the odd pipe that gets bent or rusted in storage.

A lot of it, no. A lot of equipment is built on site and would have to be
destructively disassembled to be moved, but just leaving it there without
using or maintaining it will cause it to rust or be damaged by the elements.
And even the equipment that can be resold and still physically exists would
have to be transported back to the site at significant expense. A lot of the
sites are in remote locations.

> And those people are largely available for the jobs they're experienced at
> when jobs are available, so they aren't "destroyed" either, they're just
> idled. Some will move on, some won't.

The "some will move on" being the trouble. You have somebody who knows how to
do a specific thing not many people know how to do, you lay them off and they
go find some other job doing something else that pays about as well, move
house, put their kids into new schools, now you want them back. Good luck with
that.

------
tomp
A better title would be, "Oil Crash is Ending One of the Largest Wealth
Transfers in History".

As oil prices drop, less and less money is being transferred from
(EU+Japan+AU+China) to (Middle East + Russia).

------
siculars
I've asked this thought exercise before (here) and I'll ask it again: what
happens when the world stops paying for oil?

A significant portion of the world in terms of area and population derive
virtually all their earning power from oil. When oil ceases to be valuable one
must consider the consequences. Look at Nigeria which recently requested $3.5
billion dollars in emergency aid from the World Bank[0], like yesterday, to
fill their budget gap. This will get worse not only due to current market
conditions but let's look past those to utopia: a world with no need for
fossil fuels. These economies are completely dependent on fossil fuels - for
everything - what would that utopia look like for them?

If you adhere to the school of jobs and economy equates to less terrorism then
the environmental panacea that awaits us in a world of free renewable energy
will be paradoxically diminished by terrorism and human tragedy.

Discuss.

[0]
[http://www.ft.com/cms/s/0/f3f2f140-c8f0-11e5-be0b-b7ece4e953...](http://www.ft.com/cms/s/0/f3f2f140-c8f0-11e5-be0b-b7ece4e953a0.html#axzz3z1eDb7iw)

~~~
theworstshill
Its going to come sooner or later though. Maybe this could be a good kick in
the butt for nations that lived off selling their natural resources for so
long that they have never bothered doing anything else. Middle east is the
biggest offender, followed by Russia and a few in Latin America.

A few locals are already voicing concerns on that, e.g.:
[https://www.youtube.com/watch?v=GvvvomANbRo](https://www.youtube.com/watch?v=GvvvomANbRo)

~~~
aprdm
What about Norway?

~~~
theworstshill
Its kill.

[http://atlas.media.mit.edu/en/profile/country/nor/#Exports](http://atlas.media.mit.edu/en/profile/country/nor/#Exports)

Edit: yeah Norway is definitely going to go to the shatter unless they invest
in high tech right now. Compare this with Canada for example.

[http://atlas.media.mit.edu/en/profile/country/can/#Exports](http://atlas.media.mit.edu/en/profile/country/can/#Exports)

Nor: >50% of exports are crude and petroleum based products Can: ~25% of
exports are crude and petroleum based products

~~~
maxerickson
Norway is notable for not fixing their budget to their oil exports, they've
been squirreling it away.

~~~
ptha
_In August 2014, the Government Pension Fund controlled assets were valued at
approximately US$884 billion (equal to US$173,000 per capita) which is about
174% of Norway 's current GDP. It is the largest sovereign wealth fund in the
world_
[https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...](https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway)

------
salimmadjd
This will make food cheaper for billions around the world, as price of food is
strongly tied to the price of oil.

In US alone, going from $4/gallon to $2/gallon gives $400B/year (oil and food)
more spending money in the pockets of consumers. Oil industries favor
relatively a few, but lower prices favor everyone.

On the flip side, the decade which includes heavy Iran sanctions and the Iraq
war, Saudi's foreign reserve increased by almost $700B, in contrast the decade
prior increased only by almost $20B.

The price crash triggered by Saudis wanting to make Iran a less interesting
investment after Obama's Iran Deal (with a huge cash reserve, the thinking is
they can last a lot longer) and the market prospect of more oil flooding the
markets after Iran's sanctions were removed.

OT: How many know Saudis are the largest shareholders of Fox News outside of
Murdoch family [0]?

[0]
[http://www.sec.gov/Archives/edgar/data/1308161/0001193125133...](http://www.sec.gov/Archives/edgar/data/1308161/000119312513352464/d586263ddef14a.htm)

------
TaylorAlexander
There is so much going on in this article. The quote from a wall street banker
says lower oil prices "will push back $3 trillion a year from oil producers to
global consumers"... But since oil companies don't pay us to take their oil,
the only way that could be true is if you believe that the people's money is
supposed to be yours. Which perfectly sums up the attitudes of wall street
bankers.

If I used to pay you a big pile of money, and now I pay you a smaller pile of
money, that isn't a shift of money from you to me.

~~~
Jtsummers
Barring deliberate cost saving measures, consider something like electricity
costs. Your electric use is probably pretty consistent whether the price is
$0.10 or $0.15 per kWh (ok, perhaps not yours, but average across the
economy). Depending on your environment and what you do, you _have_ to run
your fridge, you _have_ to run your AC/heat, you _have_ to turn on lights, you
_have_ to manufacture your goods (if you're a business and want to stay in
business). The same (roughly) amount of electricity will be used regardless of
the cost.

If electricity suddenly drops in cost by 50%, then money you expected to spend
on electricity is now being left in your accounts. There's been no actual
shift, but the expected movement of money has been altered.

~~~
spydum
I think the point was that the direction never changed, only the amount, yet
it's portrayed as if the direction was reversed, leading to the conclusion
that folks on wall st have a tainted view of the world.

~~~
jabgrabdthrow
Perhaps, but I think even untainted econ undergrads talk about everything in
terms of rates instead of quantities.

------
vinhboy
As someone who cares about the environment. It's really sad to me that Truck
and SUV sales are going up. It's kind of crazy that people have already
forgotten about $5 oil...

------
jmspring
One wonders, when oil prices went through the roof, we got all these extra
fuel surcharges on things like airline tickets.

Now that we are back to near $30/barrel, those charges are still there.

~~~
ConroyBumpus
“All bad precedents begin as justifiable measures” - Gaius Julius Caesar

------
maxerickson
Is this really something that would traditionally be called a wealth transfer?

The oil producers are mostly going to be selling all that oil at a profit, so
they aren't expending any wealth. The Saudi's are foregoing holding onto a
bunch of wealth by selling oil at low prices instead of cutting production,
but they aren't transferring wealth to oil consumers, they are spending their
wealth on the national budget there. Other producers seem a lot more inclined
to cut production, so they aren't really transferring wealth either.

~~~
jonknee
Many (most?) petrostates budgeted a much higher price for oil so the current
market has them running giant deficits and dumping any easy to sell assets
they have (sovereign wealth funds have been liquidating bonds and stocks).
Wealth transfer sounds about right.

~~~
maxerickson
Yes, but as I at least alluded to in my comment, I think it is reasonable to
describe most of that as a transfer of wealth to their citizens, not to oil
consumers (if you assume that they are still earning at least a small amount
on the oil they sell, which is likely true for Saudi Arabia).

~~~
jonknee
Saudi Arabia ran a record deficit of $98bn last year (~16% of GDP). That's
massive and oil wasn't so cheap the whole year so 2016 could be really
massive. The government and citizens of Saudi Arabia have a lot less wealth
because of the oil price downturn.

To pay for it they are slashing spending and liquidating non-oil assets. Their
foreign reserves have gone down over $100bn from their peak and is down to
four years at current spending levels. Who wins? Whoever was buying their oil.

~~~
maxerickson
Yes, I understand that consumers benefit massively. But they are selling the
oil at a lesser profit, not selling it at a loss.

If there was an extrinsic way to say that the value of oil in that ground is
higher than the price they are charging for it, then it would clearly be a
wealth transfer. Short of that, I don't think it is so clear, it can just be
sensible trade.

A dumb insulting analogy: I build you a dresser (pump oil) and use the money
you give me to pay for part of a car (I spend the proceeds locally, but also
spend more than the proceeds).

If the price for the dresser is fair, I'm obviously not transferring wealth to
you.

~~~
aduric
Even if they are not technically selling at a loss (I actually suspect that
they are, but in any case), their opportunity for a particularly high profit
margin is something that is priced in to their outlook when they are looking
to invest and purchase assets. If all of a sudden they don't have as many
marbles to play with, they either need to liquidate assets they currently have
to the control of foreign owners and invest more strategically (greater chance
of using these marbles in non-wealth creating opportunities) or don't invest
at all and lose all of these opportunities in the future.

I can transfer my wealth to you either by just giving it to you, or I can
transfer my wealth to you slowly over time by not being able to invest in
wealth generation at the same rate as you while my base investments
depreciate.

------
zeeshanm
Going a little bit off on a tangent here but this article reminded me of how
the gold price against the dollar has historically been set:

>Every morning at nine o'clock, [acting treasury secretary] Morgenthau; Jesse
Jones, the head of the RFC; and George Warren would meet with the president
over his breakfast of soft-boiled eggs, to determine the price of gold for
that day. They began at $31.36 an ounce. The next morning this increased to
$31.54, then $31.76 and $31.82. No one had a clue how they went about setting
the price, although everyone presumed that some subtle analyses of the world
bullion and foreign exchange markets went into the calculations. In fact, the
choice of price was completely random. All they were trying to do was to push
the price a little higher than the day before. The exercise brought out the
juvenile in Roosevelt. One day he picked an increase of 21 cents, and when
asked why, replied that it was a lucky number, three times seven.

Source: "Lords of Finance"

~~~
rdancer
The point of setting magic numbers in that manner is the continuous employment
of people tasked with explaining how discovering that this was how it worked
all along was "unexpected" and "surprising".

------
ddlatham
Do you count a stable climate as wealth? If prices continue to ignore that
cost and demand increases then that's a massive destruction of wealth.

------
PinguTS
I do not get it. Are people really that shortsighted? Are analysts who only
thinks, that people are shortsighted?

I get, that if oil/gas goes down, there is an incentive that I drive more with
my car.

But I don't make a car buying decision depending on oil/gas prices. When I buy
a car, I buy it for use for the next 3 years. But I will not know the oil/gas
price in the next 3 years. So my decision depends more on the car price itself
and not on the oil/gas price.

~~~
crpatino
People that reason like you are in the exception, even if they come to the
same conclusion, they will do so for different reasons.

There is a market for SUVs, and they are sensitive to oil prices. Specially
because when oil prices go up, other necesities go up as well at the same
time. On the other hand, price go down, and they will act on the aspirations
they already had of owning a SUV. They see prices going down as an
opportunity.

There is also a market for small cars. Whether they do it because they are
frugal, or because they are green, or because they drive in down town and need
a vehicle that will navigate the traffic efficiently and is easy to park in
tight spots, they won't buy SUVs no matter how much the oil price goes down,
or the SUVs price goes down I'd say. Many will see buying such product as
going too strongly against their individual or tribal identities!

------
sremani
In my opinion its the other way round, the current prices are comparable to
the ones 12 years ago, so the current oil prices have stopped the wealth
transfer.

~~~
maxerickson
I suppose the perspective that I also missed in my top level comment is that
the oil buried in the ground is a form of wealth.

So selling it cheap transfers that wealth to the people that use it. The
global economy seemed functional enough at $60 oil, so the decision to keep
the pumps flying when the price is below that is a little bit of a wealth
transfer.

------
singularity2001
"Blanch still sees huge upside potential in terms of automobile penetration"
Is that biz-speak for: soon more cities will be polluted like Beijing?

------
grok2
This feels like a feel-good article designed to stem the negativity in the
market over oil prices. Who thinks of falling prices as wealth transfer? And
the article doesn't even show wealth transfer and instead talks about more
consumption due to cheap oil.

~~~
refurb
_Who thinks of falling prices as wealth transfer?_

Seems like a reasonable description to me.

Oil price = $100/bbl Gas = $4/gal I spend $400 per month on gas.

Oil price = $25/bbl Gas = $2/gal I spend $200 per month on gas.

The extra $200 I have each month used to go to the oil producer.

~~~
grok2
It _was_ a wealth transfer when the prices were higher -- you were giving your
money ultimately to the oil producers. When the price is down, you are just
saving money -- there is no transfer of wealth.

------
headgasket
I believe wealth transfer is not the right terminology. Short to medium term
economic leverage would be more appropriate, IMHO. Producers have temporarily
lost the upper hand, while over capacity allows consumption growth that would
not have been possible otherwise. The opposite mouvement that strong demand
and restrictive policy caused pushing prices to incredible heights not too
long ago. That enticed a ramp up of less economical production such as tar
sands and fracking. The pendulum will swing, it's 100% certain, the key to
profit from it is to time that swing... to see the signal in macro factors,
some of which are alluded to in the article.

------
madaxe_again
This is short sighted, and fails to consider what drives the price of oil, and
what the current movement means for the chaotic system that is the
petrochemical economy.

Oil prices are down due to massive overproduction over recent years, due to
high oil prices, and opec sitting quietly on vast reserves that weren't on the
market.

The cause isn't important, though - what is is the effect. Over recent years
petro companies have invested in getting at fuels based on high prices - deep
drilling, fracking, tar sands, all are really expensive. This means that
they've invested in stuff that has eaten at their bottom line and they can't
currently use as it's not economically viable.

Bp's earnings statement today illustrates this impact, and it's early days yet
- if the price remains suppressed, which it likely will, there will be
insolvencies, which will then be bailed out or bring down leveraged up to the
eyeballs banks and investors with them.

Once that happens, supply will fall again, prices will rise, and we'll have
another, even more violent cycle - except maybe we won't, as industry won't
tolerate a wildly unpredictable energy price and will look to other more
reliable sources.

Anyway. I reckon that we'll see the energy industry turned on its head before
this chapter closes.

~~~
zrail
This happens every few decades. The supermajors (ExxonMobil, Chevron, BP,
Total, Shell) are all structured to survive events like this. Smaller upstream
companies and suppliers are going to get wiped out, but the supermajors will
persist.

------
akshatpradhan
>Take China for example, where the strategist sees the oil plunge helping to
fuel a boom in SUV sales: "Moreover, the low oil price is encouraging Chinese
consumers to buy increasingly larger cars. Sales of SUVs, the heaviest
passenger vehicles category, are up 60 percent year-on-year in the last three
months, while overall passenger vehicle sales are growing robustly at 22
percent."

This is terrible news for renewable energy causes.

------
perseusprime11
For more information, read the more accurate and in-depth coverage on the Oil
crisis at Economist: Who's afraid of Cheap Oil?
[http://www.economist.com/news/leaders/21688854-low-energy-
pr...](http://www.economist.com/news/leaders/21688854-low-energy-prices-ought-
be-shot-arm-economy-think-again-whos-afraid-cheap)

------
ChuckMcM
While I have read so many different oil "stories" over the years from we're
going to run out in 1981, to "peak oil", to "enough for millenia" to "its made
by microbes not dead dinosaurs" to "we don't really need it, its just cheap".
That it all sort of swirls together :-)

However, the bump in economic activity should be a wake up call to everyone
that the current recession/malaise isn't about interest rates or fiat
currencies, its about a lack of circulation of capital, not enough is getting
back to the consumers to support economic activity (or at least that is what
seems to be shown by giving people a bit more disposable income by reducing
the drain from one of the 'must spend' sources[1].

[1] Typically food, housing, energy, and of late communications.

------
norea-armozel
I wonder how the Saudis and company will respond once EVs become as reliable
as ICVs? Mind you, I don't see an EV 18-wheeler taking over any time soon, but
I can see an EV sedan becoming the dominant vehicle in most of suburbia in the
next decade. I think their attempt to kill shale oil is a bad move. They
should be focused on maximizing the value of their reserves while they have
time to do it. A soft landing should be preferable to a hard one where most
oil becomes more or less a junk commodity (excluding plastics).

Also, I wonder how does all this factor in with regard to other renewables
(just solar and wind, no fusion since that's a crap shoot either way). Any
ideas where that may lead?

~~~
lttlrck
Even if they do kill shale oil, the reserves will still be there waiting to be
exploited in future.

~~~
norea-armozel
That's true, but I wonder if their game includes buying them out then? At
least when they go under or are nearly bankrupt.

------
rm_-rf_slash
What about the emerging resource economies that send raw materials to China?
If they lose serious business then for them it's not a wealth transfer - it's
a cessation.

Besides, if we in the developed world have learned anything in 30+ years, it's
that falling commodity prices fail to provide a sustainable higher standard of
living when incomes stagnate and housing costs rise. I would hardly call that
a wealth transfer, more like a temporary bonus - and a weak one at that.

------
dataker
After 2013, things changed.

For the first time, there was an inverse correlation between oil prices and
the US stock market.

[http://energyfuse.org/wp-content/uploads/2015/08/crude-
oil-p...](http://energyfuse.org/wp-content/uploads/2015/08/crude-oil-
prices.jpg)

------
ck2
Yeah but it is literally trickle down wealth transfer.

They made millions but you are getting $10-$40 a month back.

Plus as a result we will get more war and extremism out of the middle-east and
Russia as they start clawing back all kinds of perks.

------
S_A_P
Growing up in Houston, Ive seen the boom bust cycle that seems to have been a
part of the oil business since Rockefeller was running Standard Oil. Just
because oil is cheap right now doesn't mean that people are going to stop
working on clean energy and a replacement for petroleum based transportation.
It may slow things negligibly but people who are smart enough to be looking
into that aren't really swayed by the price of a barrel of oil.

The Saudis are trying to sweat out the more expensive production methods,(tar
sands, bitumen, shale) as part of a long term play to get the price of a
barrel of oil to where they want it ~80-100/bbl. I don't think they
anticipated that US and other producers would just make up for the lost
revenue by producing more(again, something that goes back to the beginnings of
the oil business). The government is at risk of making themselves insolvent in
the next 5 years or so if they continue this policy[1] and Im not really sure
why they(or any producer) are making such short sighted decisions. Its not
going to get better until the reduce the supply side glut[2]. Most producers
are reactionary to this type of volatility and cancel well completions which
take many months to bring online. Once we have reduced the over supply look
for another swing as consumption overtakes available of supply until new wells
can be brought back up to speed. From the information I have being in the
business, that will take about 2-3 years or more, which may cause some pretty
catastrophic financial crashes as Saudi Arabia, Nigeria, and other producers
run out of money, which is already happening.[3]

keeping oil in the 50-100 dollar range is probably best for the world economy,
but keeping everyone honest enough to produce the amount needed to get oil
prices there is the problem. IMO, the blip in SUV sales isn't going to
significantly impact the environment. Even SUVs are getting 20mpg hwy in real
world driving now. This is easily 25-50% better than the last time oil was
cheap 10-15 years ago. Government standards are still mandating better CAFE
scores, and everyone will be producing electric cars in the next 5-10 years.
Some of the supply glut could be blamed on the fact that most cars are more
efficient now and are using less oil.

[1][https://www.rt.com/business/319465-saudi-bankrupt-
projection...](https://www.rt.com/business/319465-saudi-bankrupt-projection-
imf/)
[2][https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...](https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_SAX_YCUOK_MBBL&f=W)
[3][http://www.businessinsider.com/nigeria-is-running-out-of-
gas...](http://www.businessinsider.com/nigeria-is-running-out-of-gas-2015-3)

------
neeP5ae0
In the long term this is bad for US dollar. Oil exporters will sell US
obligations to cover their budget, this could possible lead to global
deleveraging and US dollar collapse.

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ohthehugemanate
autoplay video? Remind me to never ever visit bloomberg.com again.

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moonshinefe
Unless you're in a country that isn't like the US, such as Canada. Then your
dollar just tanks and everything besides the price of oil goes up, including
food...

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imglorp
Don't the costs of some products include transportation costs, which should
follow oil prices? Assuming gouging is under control of course.

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dreamdu5t
Translation: Wall Street traders whine about losing money. Cry me a river...

