Tags: Beaman | oil | gasoline | rebound

Steve Beaman: Oil & Gasoline Prices Won't Rebound Soon

By    |   Tuesday, 20 January 2015 04:05 PM

Oil and gasoline prices have dropped to 5 ½-year lows in recent days, and Steve Beaman, chairman of the Society to Advance Financial Education, told Newsmax TV that he doesn't see them coming back soon.

U.S. crude oil traded at $46.49 a barrel Tuesday afternoon, and national regular gas prices averaged $2.05 a gallon.

Beaman told the "MidPoint" show on Newsmax TV that he wasn't impressed by the views of John Hofmeister, former president of Shell Oil.

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Hofmeister told USA Today that "the next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next."

Hofmeister said gas prices may rise to $4 next year.

Beaman's reaction: "he's actually talking to the traders trying to boost up the price a little bit."

Many professional gasoline traders say it will stay around current levels or drop further, Beaman said.

"The reality is the revolution in shale oil production has truly changed the dynamics in oil pricing," pushing supply up and prices down, he said. U.S. oil production has hit its highest level in at least 31 years.

"Granted, global [economic] growth over a long period of time will come back and grow," but many analysts are cutting their global growth forecast for this year, Beaman noted.

"I don't see anything running those prices up right now, because there's plenty of supply and a decline in demand."

Meanwhile, Beaman has no beef with the estimate that Facebook provided $227 billion to the global economy and generated 4.5 million jobs. The estimate came from a study conducted by Deloitte for the company.

"I buy it," Beaman said. "It's all part of this what I refer to as disruptive technology. . . . Small businesses are able to use Facebook to promote their business and their brand in a better way than they have been able to, so it's a close number."

On the corporate earnings front, Johnson & Johnson reported Tuesday that the dollar's strength lowered its revenue by 4.5 percent in the fourth quarter. The dollar has soared to multi-year highs against a range of currencies in recent weeks.

A rising dollar hurts U.S. multinational companies by making their exports more expensive in foreign currencies and reducing the value of their overseas revenue when converted into dollars.

"This dollar is a conundrum," Beaman said. "When you have a strong dollar, it benefits consumers who can buy more with their dollars, but it hurts exporters like Johnson & Johnson.

Given increased globalization, "we're going to have to closely monitor how those currencies relate, so that we don't put too much burden on the exporters," he said.

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Oil and gasoline prices have dropped to 5 ½-year lows in recent days, and Steve Beaman, chairman of the Society to Advance Financial Education, told Newsmax TV that he doesn't see them coming back soon.
Beaman, oil, gasoline, rebound
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2015-05-20
Tuesday, 20 January 2015 04:05 PM
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