Tag: falling oil prices

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Canada Economic World

Is Shale Oil Responsible for Falling Oil Prices? OPEC Seems to Think So

OPEC, shale oil, falling oil prices
OPEC, shale oil, falling oil prices

According to the UAE it is not possible for OPEC alone to reverse falling oil prices, the output of shale oil also needs to be curbed as well according to the United Arab Emirates. Is this just sour grapes though? Shale oil has helped to bring oil prices down, but in the past OPEC could set costs and cause increases without any help. That is no longer true today as the world moves away from oil dependence on the volatile Middle East and towards alternatives like shale oil. According to Suhail al-Mazrouei, the UAE Energy Minister, “We cannot continue to be protecting a certain price. We have seen the oversupply, coming primarily from shale oil, and that needed to be corrected.” Not everyone shares this view though.

While OPEC may blame falling oil prices on shale oil the group did not lower their production from 30 million barrels a day during the November 2014 meeting, in the hopes that the lower prices would force the producers of shale oil to go under. Mazrouei said “We are telling the market and other producers to be rational, to be like OPEC and look at growth in the market.” Crude oil has fallen below $50 a barrel in some markets, and that has many in the Middle East looking at falling revenues. Right now oil is at the lowest point since 2009, 6 years ago. For drivers the falling oil prices are seen as a welcome relief though, with gas in some parts of the USA below $2 a gallon for the first time in a long time.

 

Categories
Canada Ft Mac

Fort MacMurray Mayor Rules Nothing Out With Falling Oil Prices

falling oil prices, Fort MacMurray
falling oil prices, Fort MacMurray

According to Fort MacMurray Mayor Melissa Blake nothing can be ruled out and all options are on the table as falling oil prices create the possibility of economic damage to Wood Buffalo. Blake spoke up and said that the local council will have to reexamine the current priorities if falling oil prices continue. According to Mayor Blake “Because of the current economic circumstances, we will have to take a harder look at our financial future,” she said. “I know we will have to make some very hard decisions if the economic downturn continues.” Any solution that has been examined already could have negative consequences for the Wood Buffalo area, and this is something that local government officials want to avoid if at all possible.

The falling oil prices mean that Fort MacMurray could see less income than expected in the coming year, but the infrastructure of the area needs work and capital projects planned are much needed. According to Councillor Phil Meagher “During the Klein government, nothing was done and we ended up extremely behind on things at the worst possible moment. As we are talking about this, Highway 63 is being twinned. That highway shouldn’t have been twinned 10 years ago, it should have been twinned in the 1990s after careful planning.” On the other hand if projects are scaled back or put on hold and falling oil prices reverse quickly the results could be disastrous. Fort MacMurray Mayor Melissa Blake explained “At this point, all options are on the table if things continue to get worse. It’s unfortunate we are facing these economic circumstances and we have to do what is necessary to get by. At the same time, we cannot be caught by surprise again and be unprepared for a rebound.”

 

Categories
Economic U.S.

Falling Oil Prices Could Lead to Gas Tax Hike in USA

gas tax hike, falling oil prices
gas tax hike, falling oil prices

Falling oil prices could lead to a gas tax hike in the USA if some elected officials have anything to say about it. Right now Americans are enjoying prices at the pump that are the lowest seen in half a decade and some see it as an opportunity to raise some revenue and fix the crumbling US infrastructure. It is undisputed that the roads and bridges in many areas of America need to be repaired, and a gas tax hike could help do this as long as prices stay low. Few people want to see new taxes though, especially at a time when many Americans are still struggling financially. The tax on fuels has been flat for the last 2 decades, while the infrastructure of the country has aged and is starting to show wear and damage.

Some who discuss a proposed gas tax hike as a result of falling oil prices do not see things the same way as many politicians though. Lower oil prices are providing a much needed break for American consumers who are faced with rising costs in many other areas. Food prices continue to go up, healthcare costs and insurance premiums have spiraled out of control, and people are feeling pinched of every penny right now. Raising taxes in any form may not sit well with the voters that the politicians depend on to keep their jobs. Another concern voiced is what happens if oil prices go back up? Will any gas tax enacted be eliminated if this happens?