States where oil and gas exploration are booming, including Texas, North Dakota, Louisiana, Oklahoma, Ohio and Pennsylvania among others, have provided numerous sales of manufactured homes, plus modular and workforce housing units.
When oil prices began to drop, some thought doom and gloom might return. Thanksfully, American producers are still going forward with great gusto.
This week’s announcement by Arab OPEC producers has also inspired some optimism. Their take on it is that “global oil prices will rebound to $70 – $80 a barrel by the end of next year as a global economic recovery revives demand.”
OPEC also announced they would not cut production, even if the price of oil fell to $20 a barrel. This caused a flurry of optimism reflected in the rise of Brent crude 1.1 percent at $60.79/bbl, while West Texas Intermediate (WTI) is up 1.5 percent at $56.10.
OPEC’s is not the only positive voice concerning the future of energy.
According to Marketwatch, U.S. energy investor T. Boone Pickens, has forecast that “Brent oil will be back at $90 to $100 a barrel within 12 to 18 months.”
Morgan Stanley said, “It wouldn’t be surprising to see some value buying over the next two months, as global oil demand rises in the northern winter, while spending cuts by oil companies and falling numbers of drilling rigs in the U.S. may provide some comfort to investors.”
However, the bank warned that “any oil-relief rally is likely to be limited and short-lived, barring a major outage,” citing OPEC’s decision not to cut production, new oil supply coming in early 2015, and a strengthening U.S. dollar.
Not surprisingly, falling oil prices seem to be causing some disruption in the economy of Russia.
Accordingly to the International Business Times, “The Russian ruble has lost around 40 percent of its value since the summer, as falling oil prices have battered the country’s export revenues. The country has already tried to stabilize the currency by hiking interest rates to 17 percent, but this has so far failed to have the desired effect.”
Reuters reports that Russian Prime Minister Dmitry Medvedev has signed an order requiring the country’s largest state exporters to sell part of their foreign currency revenues to help stabilize the ruble. In the coming two months, companies may provide the market with approximately $1 billion per day, which along with other measures taken by the central bank last week, is hoped to curb volatility.
Some speculate that OPEC’s stance is aimed in part to tame Putin and Russian aggression. Time will tell.
Bottom line, while Russian’s may suffer, the overall impact on the U.S. economy is muted to good. One more MH related note. Buyers of manufactured homes have been asking, when will the price of transport from the factory to retailers and communities be better reflected in the cost of MH? ##
See related article: http://www.mhpronews.com/blogs/daily-business-news/alpha-barking-up-the-wrong-tree-decline-of-mhcs-in-pa-and-oh-doubtful/
(Photo Credit: Bloomberg News)
