Oil prices plummeted again today, futures settling at $49.62 a barrel on the NY Mercantile Exchange. It hasn’t been that low since May of 2005. Considering that oil reached a peak of $145 a barrel in July of 2008, the loss of nearly $100 a barrel in just four months is a sudden shock that is pleasinng many people. With the economy doing so badly, lower prices at the pump are a very welcome relief.
Experts have predicted that the price could drop as low as $30 a barrel, if the world economy doesn’t improve. One thing is certain: The consumer will not complain. With Exxon showing record net profits of billions of dollars each quarter this year, the public has little sympathy for petroleum providers.
Another side effect of the dropping oil is that the dollar is up — WAY up. The US dollar is the coin of the oil realm. Everyone must get dollars to buy oil. Rupees aren’t accepted. Neither are Yen or Euros. So as the price of oil rose, the value of the dollar — as told by how much oil a dollar would buy — dropped. Now that oil is back down, the dollar buys a lot more oil, and the U.S. dollar is strengthened. With global oil demands down for the first time in 25 years, it looks like American dollars are going to be even stronger as the plunge continues.
But what are we doing with this newfound financial strength? Sure, it’s reasonable that we’ll take a deep breath and maybe go for a little drive just because we can finally afford to do so again, but then what? As the global economy recovers, demand will be up, crude prices will be up, and we’ll all be struggling and taking out loans to fill up again. Let us not forget or go soft on the subject, now that there’s a little relief.
Now is a perfect time for us to invest in our freedom, in independence from oil, foreign AND domestic. Let’s take some of that money and build wind turbines. Let’s spend a bit on solar panels. Let’s go ahead and develop electric cars and tide generators. Let’s let our creative genius out to play. Let’s see to it that by the time the economy is back on its feet again, we won’t need or want fossil fuels anymore.
What about the oil producing nations? No, they’re not all rolling in black gold, but most of them have made so much that their great grandchildren will never see a financial crunch. The poorer nations’ internal supply problems won’t be solved by us buying up more oil that they don’t have, but we may be able to help them by bringing oil-free technologies to their door, if we don’t let this opportunity pass.
Enjoy the relief for a very brief while… but then let’s roll up our sleeves and continue to develop alternative energy technologies. Let’s invest in a fossil free future now!