Ondergang Khadaffi boost wereldeconomie

In short order, Libyan oil production will ramp up.  As it does, oil prices in world markets will fall and oil futures markets will reflect the expected increase in production of oil from Libya.  The key prices to watch are those trading in Europe, like Brent.  US oil prices (WTI) are no longer the leading indicator of world prices intersecting with world supply/demand.  Excess inventory at Cushing, OK is complicating the pricing structure.

We expect oil prices to fall when highly desirable, sweet Libyan crude production is fully resumed and enters the pipeline.  Maybe, they are going to fall by a lot.  This will come as a much-needed boost to the US economy and to others in the world. 

Remember: the oil price acts like a sales tax on consumption.  To clarify this relationship we convert crude oil prices to gasoline prices and then estimate what a change in gas price will mean for the American consumer.  Roughly, a penny drop in the gas price per gallon gives Americans 1.4 billion more dollars a year to spend on other than gasoline.  That is a huge stimulant to the economy.  The ratio is different in Europe because the gas taxes are so much higher there.  Nevertheless, it is still significant.