Even though crude oil producing countries had voiced their
“howls of derision” over plunging crude oil prices, but is downward trending
crude oil prices good for the global economy?
By: Ringo Bones
Crude oil producing countries and multinational crude oil
extraction companies had been complaining since the 2008 global credit crunch
that if crude oil prices fall below 100 US dollars per barrel, there would be
no economic incentive anymore for crude oil exploration and develop new finds.
But most economists beg to differ that a downward trending crude oil prices
will be good for the global economy and primarily benefits the developing
economies. Both premises can’t be true, right?
After Operation Desert Storm, economists around the world
noticed that heavy crude oil dependent countries with still developing
economies – like Bangladesh for example – experiences a 1 percent rise in GDP
for every 10 US dollar per barrel fall in crude oil prices. Though why these
countries haven’t moved away from crude oil may be blamed on conservative
business think tanks in Capitol Hill making their economies more crude oil
dependent every decade after Operation Desert Storm.
During the start of 2014, crude oil was trading at 110 US
dollars per barrel and by October 20, 2014, it was already down to 85 US
dollars per barrel. Bond and hedge fund pundits are already predicting crude
oil prices to fall to 70 US dollars per barrel before the end of 2014 while 50
US dollars a barrel crude oil prices is not out of the question during the
first quarter of 2015. Would the Rockefeller Foundation moving away from crude
oil sourced funding near the end of September be playing a part of this
downward trending crude oil trading price? Who knows, at least downward
trending crude oil prices has a
geopolitically advantageous effect of curbing the deleterious military
adventurism plans of fascist-leaning crude oil producing states like Iran and
the recent Vladimir Putin run Russia.
