Cutting the Prices: Oils price falls even lower. Why is It?

New Your Times

The price of oil has fallen down to 55 dollars a barrel. Since last summer oil prices have been cut in half. 50 % discount for consumer, but this also means a whole lot less profit for the producer.

Many believe though that OPEC is playing a role in the price cuts. Saudi Arabia is trying to have absolute price setting power over oil. Another is that, with so much oil OPEC is losing it power to set the price where they want them. This is allowing a competitive market to take place.

Only time can tell whether OPEC is losing t power, or are they trying to hold on to their absolute control over the oil market. I believe that OPEC is trying to cut off the profits that have driven the energy boom here in the United States. They are trying to stop countries from being energy independent.  

Is OPEC Behind the Falling Oil Prices?

CNN MONEY

Oil Price are, on a 5 year low. Price of a barrel is under 60 dollar mark; the national average per gallon has fallen from its height in April at 3.77 to 2.53. This price drop has been beneficial to consumers. AAA says that more people will be traveling this holiday season due to the price drop.

Producers though are feeling the squeeze. Their profit margin is shrinking, as price drop it’s getting more expensive to drill for oil. With the energy boom happening in the United States with fracking, some believe that OPEC is trying to stop the growth of the frackers to keep their monopoly on the market. The consumer feels the benefits of the price drop.

Huge Project for renewable Energy 

Newsweek

In the Mojave Desert, you’ll see something out of place. Wind-turbines have started to pop up all over the region. Renewable energy is on the rise. Within the next few years this area will become the largest wind-turbine farm in the country.

Not only will there be wind-turbines there will also be solar farms. The solar farms have already been seen and produce about 750 megawatts while the wind-turbines only produce about 315 megawatts of power. With a plan to have severely large farms of each the affects will have dramatic impact on California’s energy market.

This is great thing to see happening to a regain that doesn't have much to offer. A project this big will improve the local economy along with the creations of thousands of jobs; the project will be as big as building a city.

Good News: Carbon Emissions Cut

New York Times

The world’s top polluters have come together to as mandate on cutting back on carbon emissions (Co2). The United States and China have for a long time been leading the world in carbon emissions. It’s about time that they come together and plan away to lower theses emissions.

In the United States though, this meeting has led to many politicians to call this a war on coal. Coal is the leading producer of the country’s energy and also the leading Co2 producer. This is seen away to put a huge burden on the coal industry.

As of right now America is at a point where we need to find another source of energy. For this to happen we need to look not just here, but also overseas.  China is the world’s leading Co2 emissions producer and it doesn't seem to be slowing down. The reason is they produce huge portion of the world’s goods. If these two countries can find a way to cut their Carbon emissions, others will fellow.

UK Energy Bills Haven't Seen Din Prices 

UK gas prices have be slashed, but house hold energy bills haven’t seen the drop in price. Now the enemy companies are up against a wall to explain why this is. Over the course of a year energy cost has fallen 23%. The company’s explanation was that they but months or years in advance to prevent customers from feeling a sudden change in the market place.  Energy providers wither use the whole sale prices as their standard or they use what they have laid out in a contract with energy producers.

Very interesting to think that they energy boom just isn't happening her in the United States. It has to be happening all over the world. AS energy prices drop we won’t automatically see the savings. It might no be for a few months or to a year. It all comes down to what the energy provider is basing the bill prices off of.

Skynews

Energy Boom, Can Withstand Price Drop 

Energy is on everyone minds this year. The US has produce more oil this year then the last three years. With so much production oil prices are starting to drop. Good for the everyday joe, but for the producers, if the cost per barrel would drop another 20 dollars it could mean some heartache for oil companies. Many of these companies are medium size, they have borrowed huge sums of money. This was justified due to the high price of oil a few months ago. Now that oil dropping, these companies are struggling to find a ways to pay back the debts . To battle the smaller profits these companies have developed new way to get to the oil. Helping to increase their profits and allowing them to keep afloat for now.

As someone who is trying to fill his gas take I want the lower prices.  Thanks to the energy boom that this country is facing I now have these lower prices. The lower prices have two sides. One side doesn't make my wallet scream. Will the other side hurt the energy companies , the lower the prices the harder it will be for them to make a profit. Time will show weather prices can stay stable or will the continue to drop. 

Wall Street Journal 

The Next step after Quantitative Easing is Verbal Easing

Business Insider

For years the Federal Reserve has use Quantitative Easing (QE) as a way to push investors into riskier investments. Now though QE time is coming to an end. The next step is Verbal Easing (VE). What this is, is just reassuring the public that everything is going to be ok. Even now the market looks shaky and the Dow is showing the stress. It fell 270 points on Tuesday October 7 2014. At any given time when change is about to happen the market starts to wobble.

This is very interesting concept. To think that if only the Fed justified its action the market might not be so shaky. The VE is the next step that needs to be taken to insure that we have come back from the Recession of 2008.

Euro zone, planing on using Quantitative easing to help struggling economy.

Fox Business

European central bank plans on buys bundles of loans and other forms of debt from mid-month in an attempt to kick start the struggling euro zone economy. The bank last month lowered interest rates to help with the sluggish economy. President of the central bank Mario Draghi said bank would start buying covered bonds, which are a form of secured debt, from banks in mid-October. Their hopes are that they can start helping smaller firms grow. This program would last for at least two years. Within these two years the Central bank hopes to allow inflation rate to return to levels closer to the banks aims.

In recent years the Euro zone was hit my countries with weak economies. These economies lead to a rush of aid that hurt the Euro zone. Many of the stronger economic countries don't want the bank to help the weaker economies. These countries believe that with Quantitative easing their own economies will suffer.

The Euro zone is one of the world largest economies. If their economy is starting to slow, then we will start seeing the effects of it here in the states soon. With the euro slowly falling and some economies in the zone feeling they are carrying the weaker of zone. This might play a huge issue in the coming years.

Federal Reserve will End Quantitative Easing, but when will Rates Rise

BBC Bussiness

The Federal Reserve has made a statement that interest rates will raise after the Stimulus program ends in October, which should mean that short term rates should rise, this is not the case. Janet Yellen has said there is no set calendar date for rate raise. The Short term interest rates have been at 0% since 2008. This statement has led to two members of the making committee to walk out.  Many investors are watching and waiting for when the Fed will increase the interstate rate

The Fed has repeated itself in a new mess. With its always consistent and mind- boggling statement, “When economic conditions and the economic outlook warrant a less accommodating monetary policy, the Committee will raise its target range for the federal funds rate," The fed have repeat this statement multiply times. A member of the board walkout t of the stated that if the Fed continues on this path it runs the risk of faster rises in prices. This has led investors to simply scratch their heads and wonder.

Basically what is happening in this article is that the Federal Reserve has promise to raise its short-term loan rates, but only of the data shows that the economy haves improved. One of the factors that determine this is inflation. Inflation Last month (August 2014) is currently at 1.7% annually. This is below what the Fed’s target rate. 

Federal Reserve Cuts Monthly Assets Purchases

Forbes Article 

March 19th 2014 Federal Reserve has again shrunk down another 10 billion. This is the third time that the Federal Reserve has done this. In her first open market meeting as the head of the Federal Reserve Janet Yellen has stuck to her promise of continuity, cutting the central banks purchases of assets. The money that the Federal Reserve is called Quantitative Easing   The reason behind the shrinking of the amount of money that is flowing out of the Reserve is the economy is showing signs of improvement. 

The whole idea of allowing the government paying up of assets was to help stimulate the Post- Recession economy. The practice is called Quantitative Easing, it’s when the government pumps money into the economy to keep interest rates low and allow for growth. The Fed in December of 2013 purchased 85 billion in bonds to help support low interest Rates.

This idea of Quantitative Easing is to help improve the economy. After the 2008 financial crises, many feel that the Fed hasn’t done enough to help with the recovery. With Yellen cutting the amount of money pumped into the economy she hopes to raise interest rates and make the final push to recover from 2008 financial crises.