« Fire Steve Ballmer. Or hire SuperNanny. Or Both. | Main | Year-to-Date Sector Map »
Latest Stories
- Thinking Ahead at Ford and Charlie Brown's Football
- Mortgage Market Week in Review
- Stock Market Returns - The Wonder of Compounding
- Anyone for a 100 billion dollars?
- The Top 7 Things Every Home Buyer Should Know.....
April 28, 2008
When Does a Falling Oil Price Become Bad News?
To turn things inside-out for a moment, when does a falling oil price become bad news? Hard to imagine, I know, with oil banging against $120, but bear with me. Because an awful of things -- ranging from new tar sands projects, to more soothing solar, wind, tidal, and geothermal projects, etc. -- only really get and stay interesting when you can count on oil staying about certain minimum prices.
For example, major tar sands investment required a belief that oil would stay north of $60, which it has. And, with that in mind, at some point investors will become convinced that the new floor for oil is some higher number, and they will lay out capital accordingly. And, perversely enough, there could conceivably come a point where a declining oil price is, in some sense, worse news for this giant swath of the economy than it is good news for the rest of us.
Assuming oil stays north of $100 for a year, will we be at the point where the greater risk is a precipitous price decline? $120? Other? Just musing aloud.
Digg it
Bookmark it
Stumble it
