Let Oil Prices Decline https://s3-us-west-2.amazonaws…


Let Oil Prices Decline

40 years ago after those gasoline lines the goal of the US was to become energy independent. We are there now and lower prices for oil will be a benefit for the US economy. If a gallon of regular gasoline fell to between $1.25 and $1.50 that would provide the fuel for economic growth.

This would put the banks who lent to the weaker oil and gas companies in a bind as more loans become non-current. It seems to me that $30 a barrel is a desired goal even as banks take their losses. The regulators say they are well capitalized so please no bailouts!

Consumers buying at the pump should have the choice of buying regular gas with or without the 10% ethanol component.

Engineers in the Fracking industry should be able to figure out ways to produce and make money at a lower cost per barrel. Reduced corn production for fuel will help bring down food costs and provide corn supplies that can feed the unfortunate both at home and abroad. Corn can become a currency for foreign aid around the world.

I am surprised that increasing Rig Counts is not leading to M&A activities in the oil & gas industry?

The bottom line is that lower oil prices are positive not negative longer-term.