Today I read an artcicle about the falling oil price (maybe it'll go under 30$ per barel the next days). Why is this a bad news? Lower oil price can give an advantage for a higher productivity.
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2$\begingroup$ Why do you think it is bad news? Without us having seen the article this is difficult to guess. Perhaps it was in the Oil Producer's Weekly magazine. $\endgroup$– GiskardMar 9, 2020 at 8:20
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$\begingroup$ As Giskard pointed out it’s not bad news and most economists know it. In fact it’s an example of positive supply shock in some textbooks as a lot of industry still runs on oil... of course it’s a bad news for oil producers and people who invested heavily in oil on commodity markets, but overall people will benefit $\endgroup$– 1muflon1 ♦Mar 9, 2020 at 8:31
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$\begingroup$ @1muflon1 I did not point out that falling oil prices are not bad news. I was asking for a source/more details. $\endgroup$– GiskardMar 9, 2020 at 9:03
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$\begingroup$ @Giskard Bloomberg article....bloomberg.com/news/articles/2020-03-08/… $\endgroup$– liontassMar 9, 2020 at 9:27
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$\begingroup$ The article seems to be clear on whom this is good for and whom this is bad for. $\endgroup$– GiskardMar 9, 2020 at 14:12
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It is not necessarily bad news.
Simply put, if you're willing to buy product x (bread, car, house, ect.) then falling prices are good news for buyers, but bad news for the sellers. The same logic applies for oil. If you are a buyer, you are optimistic about falling prices, however being a seller would make you loose money and/or postpone new investments.
