The future of oil and gas after the boom
Share Now on:
What effects will oil have on the global economy?
“If there’s too much oil in the world, we can have low prices for a while. That could be the problem,” Marketplace Sustainability Correspondent Scott Tong says. “There’s a lag in the effect in the oil patch, but each day already brings another announcement of a company cutting back on their drilling because prices are too low.”
If prices stay below $60 a barrel, Goldman Sachs estimates producers could lose a trillion dollars. But Janet Yellen, chair of the Federal Reserve Board, says she thinks low oil prices are a net good for the global economy.
The contrast reflects what a lot of people think – in the short term, it is an absolute economic stimulus. Longer term, there are a lot of questions. If you’re an investor, the financial market is taking a big hit, particularly stocks that are exposed to energy and the bond market. Different parts of the economy could end up feeling the pain.
And, if we look farther into the future, the question of climate change comes up. There have been demands for a carbon tax, but Tong says: “Cheap oil is basically a carbon subsidy.”
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.