Wednesday, October 15, 2014

Why Falling Gas Prices?



There are several theories about why gas prices are suddenly and dramatically falling.

One theory is that since the U.S. has recently surpassed Saudi Arabia as the world leader in oil production, due to fracking, the Saudi's are lowering prices in order to hurt the fracking industry, which is a very expensive process and only recently became economically feasible.

Another theory holds that the global economy is much worse than being reported. Recent setbacks in the EU's, Germany's, and China's economic growth is perhaps leading to another recession/depression and the hope is lower gas prices may be a good boost.

A third theory is that the U.S. and Saudi Arabia are in collusion in the hopes of hurting Russia's oil economy.

I suspect we'll never really know, but would be interested in any new ideas.