What's oil impact to U.S. economy

Discussion in 'Commodity Futures' started by NoMoreOptions, Feb 10, 2004.

  1. OPEC cut.
  2. pspr


    NoMo..., the OPEC'ers learned in the 70's that if they cut too much they drive the world into recession which isn't good for them either. So, they try to stablize oil prices just a little higher than most would like.

    However, they aren't very good at keeping their word with each other on cutbacks so the impact will probably be nil.

  3. The US Economy is not as Industrial as it was back in the 1970's, as a result, our economy's reliance on oil is not as great as it was.

    Besides, OPEC might just trying to be "hedging" upcoming Libyan and Iraqi oil coming online.
  4. Fill 'Er Up: The Hidden Cost of Oil

    By Jason Mark, Global Exchange
    January 26, 2004

    How much did you pay per gallon of gas the last time you filled up your car's tank?

    It was probably about $1.75 per gallon, give or take a quarter depending on where you live. In the grand scheme of things, this isn't much – less, in fact, than you would pay for a gallon of milk.

    But the price at the pump is nowhere near the real cost of that oil you put in your car. After you figure in the military expenditures of securing and protecting the petroleum, the cost of lost jobs and misplaced investment capital, and the burden of periodic "oil shocks," the price is much, much higher. According to a recent study by National Defense Council Foundation, the real price of gasoline is somewhere between $5.01 and $5.19 per gallon. That's as much as $93 to fill up a typical gas tank. Our oil addiction is burning a hole in our pockets, and most Americans don't even know it.

    One of the most obvious costs of our oil dependence is the price of maintaining a vast military machine capable of keeping the oil flowing cheaply. Defending the oil that comes out of the Persian Gulf alone costs some $42.8 billion a year. This doesn't include military expenditures in oil-rich Colombia, nor the $87 billion in additional costs for the occupation of Iraq.

    Then there's the damage to the economy. According to the study, the economy loses some $160 billion every year due, indirectly, to our addiction – money wasted on unproductive industries and related health care expenses. Periodic oil shocks – 1973-74, 1978-80, 1991 – have cost American businesses and consumers another $2.5 trillion. It's almost as if we're paying for the dubious privilege of being ripped off.

    The National Defense Council Foundation is a right-of-center think tank, its advisory board packed with people such as Senators Trent Lott and Orrin Hatch. That a proudly conservative group would go through the trouble of calculating the true cost of oil shows that concerns about the United States' oil dependence transcend party lines. It's just common sense: Oil addiction, like any addiction, is dangerous.

    Yet the NDCF's numbers, however stunning, still don't give the whole picture. For example, the study didn't include the tax breaks and subsidies given to the oil industry. According to an investigation by Friends of the Earth and Taxpayers for Common Sense, the federal government gives oil corporations at least $4 billion a year in corporate welfare – money that comes straight from your taxes.

    The costs don't stop there. Oil addiction also contributes to human pain and ecological destruction that are beyond any dollar figure.

    For how do you measure the value of the species wiped out in the course of oil drilling in sensitive rainforest ecosystems? What price do you place on the irrevocable altering of the earth's climate? How can you calculate the pain of a mother and father whose son and daughter has died in a war fueled by our relentless demand for oil?

    There's no price tag big enough to capture the costs of such senseless tragedy. Our oil addiction carries a price that we cannot afford to keep paying.


    what a nice business the war is... a clear boon for the oil cartel, courtesy of us taxpayers :) Keep in mind.. the cost to produce oil out of the ground hasn't changed..if anything it has dropped... If oil cos were making money at mid teen levels $/barrel, they must reaaaally liking the 30's :)
  5. Yes, let's get off the oil and back to stone age! Yee-haw!
  6. Think of all the other products that have a petroleum base? What about the movement of goods & services that require fuel, such as the bus, airplane, auto, trucks, trains, ships, & barges, constuction, destruction, the list goes on. We're as dependent as ever on energy, while still consuming like there's a never ending supply. There will come a time, & that time is fast approaching when production is running @ peak capacity, plateaus, & then begins to decline.

    Our economic growth will then also be unsustainable, as presently thought. Then what happens? I'm not a doom & gloomer by any means. However we live in a society without much regard for future consequences. Sure it's bantied about, even mildly seeking alternatives, IMO it'll be too little too late when it's upon us. I really wish it wouldn't be so, however the nature of humans, & their lack of care for their environment, & the limited resources it can provide will inevitably bear this out.

    Take Care & Enjoy!
    L8R Kelly
  7. ever considered, taking that 250 billion spending on the war for oil, and investing it domestically on alternative sources of energy?

    ofc that will effect negatively the bottom line of major political contributors..............read: oil companies and friends
  8. Oil prices are included in almost everything you do....To judge at the gas pump is probably not one tenth of what each person really pays...

    Hey look if the middle class average annual take is $50,000...then what is the effect of a 50% tax cut....?

    Oil prices coming down 20% is probably about the same....or more....

    Why do you think we are in Iraq...and not Haiti ?
  9. Well, your sentence structure is a bit hard to follow but the central point (spend money on alternative energy instead of war) is a non sequitor.
  10. Under the Bush Administration, the USA's #1 Economic Export is DEBT!

    #10     Feb 11, 2004