Fuel price is the only organization truckers have. At $4 a gallon they all agree to say no to cheap freight, no matter what they haul, drive or what language they speak. OPECs production is a coordinated assault on american/western society industry. They dont have bills to pay. Theyve had a money fountain for generations. They are the creation point of wealth, who on earth might they owe? If canada of all places is smart enough to hold back maple syrup to keep the price high, opec is smart enough to keep oil up. Or crash it on purpose. $11 a barrel is like a light switch on everything here. Its a cue to park it all, lay everyone off and let your home foreclose.
Intuitively, cheaper barrel ought to instill more industrial confidence. Maybe except domestic oil producers, everyone else should enjoy it. Housewives, farmers, gun owners driving far to shooting ranges ... us the big rig owner too(???) Please expand on $11 a barrel being a light switch. Very interesting divagation. Very interesting...
People who dont own trucks think that high fuel prices hurt rates. They dont. At high fuel prices anyone who doesnt have their money house in order runs out of cash at the pump and goes into a fuel advance spiral. It gets the scum out of the pond. Everyone who is in order says i wont run cheap freight for crap brokers who may stiff me out of big fuel money, the risk is too high to work for scum on a promise of net 30. Truck supply shrinks back and new entrant DONT flood in because "fuel is too high to start trucking now." When fuel is cheap they come racing in thinking that its a good time. But when fuel is cheap shippers hold fast for a lower rate, brokers look for brand new entrants and work for oil field based truckers dries up so they flood into the general freight market to survive. You get a truck overcapacity at the same time as you get a manufacturing reduction because high oil price leads soooo much production. Edit- I forgot to add.. When oil is high the oil crowd is updating their equipment so trucks are high so less new entrants to trucking. And the inverse. Cheap oil makes cheap trucks at the same time as noobs rushing in over cheap fuel, which further compounds cheap freight rates. At $11 a barrel only a fool is drilling or fracking or hauling into the patch. So the waitress and laundromat and welding suppliers and hotels and campgrounds that live on oil money go belly up. Cheap oil crushes them. How can i attack the american middle class and get them addicted to a handout? Cheap debt, cheap oil, constant politics, print money and convince them to stay home in fear of each other. Like right now. Many of the competitors in the oil world didnt get their oil by purchasing it from landowners on the open market. They get it and keep it by noble birth inheritance or force. State owned oil, in "socialist" states. Red states spread disinformation about weakening dollars but its a lie. They get things and keep them with rifles and tanks. [Hungary 1949, czechoslovakia 1969, poland 1980, china 1989, chechnya 94.. All internal battles govt vs citizens.] They own the printing press. Overprinting money keeps their citizens powerless. Not them. Moscow controls opec. And iran. And the saudis, and isis.. And...
Yes. It is a misconception, Fuel is only 30 - 40 % of total cost for an owner operator and even less for a trucking company. It could be seen as an advantage by prospective owners projecting their costs through the prism of a diesel price only. I did not realize that domestic oil field production is so influential on the freight market. This is a very interesting topic.
