Martin Sumichrast – Are Oil Prices truly stabilizing?

Oil Drilling

Interesting article I read on Business Insider on Oil prices stabilize, firm demand counters oversupply that I want to comment on. A drop in oil prices usually result in the slump in economic activity or a imbalance in supply demand. What is interesting is that the overall health of the US economy is solid “B-” up from a “D-” only a few years ago, when oil was much higher. One would think prices would be going the other way. This probably means that the latter is at work. A massive spike in oil production has driven supply up, thus pushing prices down. This dynamic hurts the energy investors but helps the consumer, which should translate in a boost to the economy. Already we have seen a revised up GDP numbers and I think the second half of 2015 should be +2.5% to +3.0%

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