Why does the price of oil matter?

I don't understand how a surplus of a limited natural resource is considered a bad thing. What the fuck am I missing here, Yas Forums?

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You've been brainwashed into thinking of the economy as an equilibrium mechanism rather than a dynamic one. In an equilibrium economy abstraction, there are compensatory feedback mechanisms that restore normality. In a dynamic (real) model you can enter positive feedback loops that make big problems into bigger problems.

*Blows weed smoke* Huh?

can you please fuck speak a language that normal people who are out of the loop understand?

>equilibrium economy abstraction
>compensatory feedback mechanisms

stfu

Don't try to understand the jewish moneymagic.

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I know, right? It's like he's just making shit up.

Like crying when somebody calls me a faggot?

Stop larping as an intellectual if you cant explain things in simple terms

It's not about the oil it's about something bigger.

where do you put it? when shutdown/reopen procedures costs more than paying people to drive around in their cars for a few weeks/months.

>how a surplus of a limited natural resource is considered a bad thing.
There’s no where to put it because demand bottomed out and no one will stop pumping it’s costlier to stop/producers (RUS and Saudis) are fighting each other. Figure it out from these two facts.

It means that all hell is about to break loose.
>Here is why.

When there is no demand for oil, it means that the other markets have no liquidity to buy said oil. It means that the oil isn't being used. Oil is being used in everything. Theoretically, we could have a low cost of oil resulting in deflation, but a deflationary crisis is a thing too. The economics are too complicated to go into unless I were going to do the work of writing Yas Forums an entire paper on the topic.
>long story short.

The market is intricately interconnected. Everything affects everything. The oil is used in every part of the economy. The oil companies want to make as much money as they possibly can. The oil companies have TRILLIONS invested, and if they're going to make that investment back to keep producing oil, they have to keep the price as high as possible. The oil companies would not be lowering the price unless there was a seriously lowered demand. Lower demand of this magnitude is a sign of the economic apocalypse.

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>let me copy/paste what I read in some article
kek

its only a problem for the 10 guys holding 90% of the oil stock.

Now oil is on a surplus so thats good.

change my mind

It’s literally nothing if anything this fucks over the Middle East and Russia the most. Generally it’s used as a barometer on manufacturing and process that utilize it. Oil has been artificially been inflated for a while now. Watching OPEC sweat a bit is actually pretty funny.

can't argue there. fuck OPEC. fuck UAE. fuck oil barons. fuck the Qatari sandniggers.

The world market is based on USD. And the USD is based on the price of oil and its commodities. This is freshman college level shit

pretty simply understood to me suomi, maybe fuck off and chew some liquorice bud.

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>Retards. GTFO.

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wtf am i looking at here

Some countries budget their entire federal government around the price of oil due to having socialized oil production. When the price of oil goes down they need to produce more oil to stay afloat. When they produce more oil the price of oil goes down. Now that something outside the control of oil producers has reduced the price of oil the value is going negative and a bunch of countries are staring down actual apocalyptic scenarios.

like previously Venezuela and now Russia. Russhits are fucked.

Is this all because of ONE little flu?

Translatint for brainlets:
>ecomist claptrap: dont worry, lower prices cause greater demand, market corrects itself its ok
>reality: cratered comodity prices cause producers of that comodity to destabilize, and demand for oil doesnt magically comeback if you sell your car to buy canned beans

just a dog with his head tilted counter clockwise

thanks for nothing, faggot.

I only get my oil changed every 3,000 miles. Who the fuck cares? Some faggot who knocked up his girlfriend in high school does it fo $30. Big deal.

>beer vore
nice

In an equilibrium model, you have explanations like this:

everyone has jobs > companies have to offer higher wages to find employees > higher wages reduce profits > reduced profits reduce job offerings > fewer people have jobs > employees offer services for lower price to compete for jobs > etc etc

In other words there are counter-cyclical forces that push you back towards equilibrium from either too many or too few jobs.

In a dynamic (real world) economy,

jobs get destroyed > confidence gets destroyed > more jobs get destroyed because people have less confidence demand will be there in the future > even more jobs get destroyed because people have even less confidence demand will be there in the future

In other words, people panic and you enter into downward spirals.

Which countries? Can you rank those that get hurt most to least?

>rolling for Canada at the top of the list most impacted.

It's serious, dude. Like 5 million people died today and 10 times that were infected. Now it shrinks your penis, then it rots off.

Maybe they will try to attack America like the prophecy sa-