Down Oil price is not always a matter of happiness

Md Rezaul Karim By Md Rezaul Karim, 18th Jan 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/2qip_dtk/
Posted in Wikinut>Money>Economics

Sometimes we are happy to see some prices falling, but there are other sides of the story.

Another side of oil price

Oil price in the 2015 and impact

The current economic changes and dilemma in the developed world is indeed an interest even to follow. The two item in the economy has created a strange situation. The diminishing oil price is a good news for most of the developed countries and developing countries as well as we find some positive impact out of it. The big car shows in the USA have shown the revive of the earlier sixties trend of big gas guzzlers back, big pick up vans and SUV’s are again in vogue in the USA market as oil price is as low as $48 per barrel. The cheaper fuel always encouraged the big cars to boom in the USA as usual. The truck sells with very good profit margin and hence the Car makers are happy to go with it. Again the government tax earnings in this sector always have a green effect due to good sale. For Germany, it’s economy is also escaped the recession narrowly when it scored 1.25% GDP last year and expecting better this year first quarter. Germany, meanwhile planning to buy European Central Bank’s bond to help Greece to recover as an associate. Again tax payers are not happy with it when conflicts of interests count. Similarly GP Morgan the world’s biggest financial giant is facing criticism and many feels it should be split and should not grow that big to black mail the national economy. Because if the size of the bank is bigger than the economy or central bank, the whole country or economy would be arrested in their hand, meaning their falls will collapse every other smaller ones along with the economy. So, government is bound to cooperate with it when in need, that is at the time of financial crisis, for which may be management is responsible! Again, the oil price has got negative impact on certain economy where the life blood- employment is hefty and dependent on this sector. Say, North Sea oil industries where 2500,000 people working, a good chunk of the Scottish population. Report says they are facing liquidity problem due to falling oil price. So, government is earning less from taxes and other charges as sales revenue is down. Again, the number of employment would be negatively affected and political interests of the party and government would be in question if the situation further deteriorates. Seemingly another problem is popping up with the less oil price. In this matter Germany the Europe’s biggest economy is relatively in a better position, as it’s economy based on big and technology industry and not on oil industry, but their machines are much related with oil consumption and price. Hence less oil price means more German machine exporting and growth.

Tags

Economy, Employment, Finance, Oil Price

Meet the author

author avatar Md Rezaul Karim
I am a teacher engaged with the Southern University Bangladesh. I Like to use my spare time by writing and reading. I take it as a fun and source of inspiration in pursuing knowledge.

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Comments

author avatar Nancy Czerwinski
18th Jan 2015 (#)

Thanks for sharing this article.

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author avatar Md Rezaul Karim
19th Jan 2015 (#)

Thank you Nancy for stopping by.

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author avatar Sivaramakrishnan A
18th Jan 2015 (#)

Good highlight Karim. The lower oil prices are good for majority of countries that are dependent now on few exporting countries. I am happy cost from clean sources like solar are dropping fast to compete with fossil fuels. That will benefit almost all countries benefit as they can become energy independent and no need for huge tankers to transport and also pollute the seas and environment - siva

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author avatar Md Rezaul Karim
19th Jan 2015 (#)

I subscribe your point of view, indeed I love to use the green energy as well, but due to inconvenience still we are lagging behind.

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author avatar Kingwell
4th Mar 2015 (#)

Here in Canada too falling oil prices has it's downside, especially in Alberta and Newfoundland And Labrador. Blessings.

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author avatar Mr. Mamun
8th May 2015 (#)

hmm......quite informative......

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author avatar Md Rezaul Karim
4th Jun 2015 (#)

Interestingly our retail price of oil controlled by government, not by market. We pay more when price of oil is up, but not less when price is down! Don't believe it? Believe it...

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author avatar Ram Bansal
19th Jun 2015 (#)

Fall in prices is never good to economy, But it comes as a relief to consumers when prices are artificially raised for high profits.

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author avatar Md Rezaul Karim
22nd Jun 2015 (#)

Thanks Ram for stopping by, and in economics we find variations and conditions which sometimes misfit in one case and perfect for another....I don't disagree with you in a certain perspective and context.. Thanks anyway..

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author avatar Peachpurple
19th Aug 2015 (#)

Oil prices fall for a short time but bounce back at a higher level

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author avatar Souvik
2nd Nov 2015 (#)

Very well written Karimji, economic concept is well explained.

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author avatar Md Rezaul Karim
4th Nov 2015 (#)

Thanks Peachpurple and Souvik for you time..

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