Why the US prefer lower price of oil?

[TOM YIN 0]

May I ask why the US prefer lower price of oil? Since the USA is already an export country of oil. Too much low price is negative for the oil instury of USA.

[NickW + 2,714]

8 hours ago, TOM YIN said:

May I ask why the US prefer lower price of oil? Since the USA is already an export country of oil. Too much low price is negative for the oil instury of USA.

There is a world beyond the oil industry. I know that's hard to believe here on Oil Price. Com 😄

Anyone manufacturing or running services will prefer a lower oil price (exception being manufacturers and service industries heavily reliant on Oil (and gas)  

[Rodent + 1,424]

1 hour ago, NickW said:

There is a world beyond the oil industry. I know that's hard to believe here on Oil Price. Com

that is a flat out lie. 

[Dan Warnick + 6,100]

15 hours ago, TOM YIN said:

May I ask why the US prefer lower price of oil? Since the USA is already an export country of oil. Too much low price is negative for the oil instury of USA.

Because:  We see individual consumers first.  We like to see lower prices at the pump when we fill up our cars/trucks/motorcycles/boats/snowmobiles/lawn mowers/ATVs/etc.  We like to drive, so much so that we sometimes take long "drives to nowhere in particular" just for the fun of it.  We drive relatively long distances to work and play.  We expect our industries to become efficient and deal with the cost of doing business; we like them to think of the consumer first (many times they don't, but we like them to).  We grew up with low prices and would like to see them again, relatively speaking.  We don't like buying oil from other countries, and higher prices makes us feel like we are getting ripped off, and that we might very well be funding terrorist activities as well (Oh no you don't!).

As @NickW hinted at, the U.S. economy is made up of many industries.  So for the country as a whole, we can see lower profits in one area and have other areas that make up for the shortfall.  Oil is one of 100s of other industries, with many that are similarly large.  We consider gas to be as much of a basic daily expense as bread, milk and eggs, and expect the price to be as low as possible.

Finally, the export of oil, for all the reasons above, does contribute to our national income but is not the overwhelming factor in our economy that it is in many other countries.  The oil companies and their investors (and their speculators) care very much if they capture those profits, be we as a people are not that concerned at all; we'd rather just be reliant on oil produced at home, sold/purchased at home, and used at home.

I have tried to address the OP's question only; not whether oil is great or anything else (can we please not turn this into an ICE/EV debate?).  Anybody else is free to add their reasons to the list that I have missed, and I'm sure there are many.

[Jan van Eck + 7,558]

On 12/7/2018 at 10:28 AM, TOM YIN said:

May I ask why the US prefer lower price of oil? Since the USA is already an export country of oil. Too much low price is negative for the oil instury of USA.

The USA is a huge country, and (surprisingly) relatively lightly populated for its size.  It therefore is reliant on cheap transportation fuels to make it all work. 

The USA is still a large manufacturing country.  Its industry relies on cheap power to make it all work.  Most of that power is in the form of electricity  (some in heat, both weather heat and process heat), and lots of that electricity is produced by oil, and lately by natural gas.  Cheap power means a robust manufacturing sector.  A strong sector means prosperity, and in some sectors great wealth. 

The vast distances make the USA reliant on air transport much more than in other societies, excepting perhaps Russia. Air transport needs lots of cheap liquid fuels.  When kerosine gets expensive, the air carriers end up in the bankruptcy courts, unable to operate.  The USA also needs lots of air freight to operate. 

The USA is a technological society.  It is not as concerned with prices of oil today as you might think, as the technology is constantly evolving to get more oil (and gas) at lower costs.  So if the sales price drops, it can be and has been countered by drops in the costs involved. Let the price of oil fall; the USA will do better for it. 

Edited December 8, 2018 by Jan van Eck
typing error

[NickW + 2,714]

On 12/7/2018 at 3:28 PM, TOM YIN said:

May I ask why the US prefer lower price of oil? Since the USA is already an export country of oil. Too much low price is negative for the oil instury of USA.

The same reason many countries prefer lower oil prices and I can draw off personal anecdote. 

We fill up our car every week. Our fill is about 25 litres, with us being evil people who drive a hybrid. Anyway petrol was 5 pence a litre cheaper this week compared to last. Net result is my wife and I are 1.25 better off. 

[patrick nalletamby + 4]

Whatever Trump tweets the market reacts. The price of oil has direct affect at the bowser and on the average Joe weekly expenditure.Oil price has many geopolitical connections. In this case - it may correlate to elections or opinion polls....

[patrick nalletamby + 4]

PS this is a very disappointing trading site.....

[ronwagn + 6,290]

On 12/7/2018 at 9:28 AM, TOM YIN said:

May I ask why the US prefer lower price of oil? Since the USA is already an export country of oil. Too much low price is negative for the oil instury of USA.

Because nearly everyone goes to the gas pump and wants low prices. It is that simple. They are not rooting for oil company profits. They get especially mad with retail price fixing, gasoline taxes, and high markups on the commodity that gets them to and from work. 

[Jan van Eck + 7,558]

On 4/2/2019 at 10:45 AM, patrick nalletamby said:

PS this is a very disappointing trading site.....

Patrick, sometimes specific trading questions and issues get intertwined with the geopolitics of oil.  Although you are in the "Oil Trading" sub-section, and the questions and responses should be kept strictly to trading matters, yes sometimes it spills over.  Not to worry; lots of traders here passing their thoughts and insights back and forth.  Cheers.

[Jan van Eck + 7,558]

On 12/8/2018 at 2:44 AM, Dan Warnick said:

Anybody else is free to add their reasons to the list that I have missed, and I'm sure there are many.

The real biggie, once you get past the trucking, rail, and air users, is the downstream petrochemical industries.  Cheap US oil means cheap US feedstocks for plastics, paints, chemicals, even the preservatives used in railroad ties.  Cheap oil is a lot more valuable to Americans than expensive oil.  And you can make the same arguments for steel and aluminum, also, notwithstanding the benefits of the Trump tariffs to those basic industries.  

[Sufian 0]

On 12/8/2018 at 8:05 AM, NickW said:

There is a world beyond the oil industry. I know that's hard to believe here on Oil Price. Com 😄

Anyone manufacturing or running services will prefer a lower oil price (exception being manufacturers and service industries heavily reliant on Oil (and gas)  

Fully agreed with NickW👍