The price of oil has declined about 40% since its June peak because of the weak global economy and expanding U.S. domestic energy supplies. The result: one of the biggest and most sudden transfers of wealth in history. To: (1) American motorists, who are saving $630 million a day on gas compared with what we paid in June. (2) Major airlines, for which every penny decline in the price of jet fuel means $40 million in savings. (3) More generally, the world’s biggest oil importers, led by the United States, China, and Japan. From: (1) Big oil companies like BP, which has lost a quarter of its value the past five months. (2) Oil service companies like Halliburton, which has lost 44 percent of its value since July. (3) High-cost oil projects, such as Canada’s oil sands, which have become less profitable and could be curtailed or postponed. (4) More generally, the world’s biggest oil exporters, including Russia, whose ruble has been crumbling, Iran, and Saudi Arabia. I find this transfer of wealth perfectly fine. Do you? -Robert Reich
Posted on: Wed, 03 Dec 2014 04:07:12 +0000
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