Monday, September 22, 2014

Crude Oil - Dollar and Economy

Disclaimer: This is not a post from an Economic or Financial expert. I am just scribbling my view on something that I feel may happen.

We are dependent on the price of Crude Oil and the US Dollars. The price of our day to day items depends on this. Recently when the Dollar appreciated, the price of Crude Oil went down. The OPEC announced they will reduce the output of Crude Oil soon. 
Okay, everyone wants money. Fine. So what does that mean. 

Let us think that the price of Crude Oil is not going to appreciate (fracking and utilizing other green techs) and the Dollar also stays same. Then the OPEC reduce the output to increase the price, but the prices does not change. 
They OPEC need money for their day to day affairs as us. When they reduce the output their profit will decline. They cannot go on for ever with reducing the output to appreciate the price. 
They will have to increase the supply, which will reduce the price further. So they need to produce more and reduce the price further. 


What a beautiful dream that we get petrol as cheap as water!!! It can happen, even if we are not going with alternative fuels. 

But, we should reduce usage of the fossil fuels to save our environment. Use public transport as far as possible, walk/cycle to work, pool the car the take your friends on the weekend outing. :-)

Keep yourself healthy and save the world.