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...literally. U.S. crude oil 

    Hello guest!
 yesterday, down more than 20% from what was a four-year high set last month. It also happened to be the ninth consecutive day of losses.

Crude prices have been slumping for the last five weeks. Wondering why?

1. Key producers are ramping up output. U.S. output hit an all-time high of 11.6 million barrels/day last week, per the Energy Information Administration (EIA). 

    Hello guest!
 the U.S. is now the world's No.1 crude oil producer.

  • Plus, Saudi Arabia and Russia (the other top producers) have also been boosting production since the summer.

2. Is demand deteriorating? The EIA reported U.S. crude stockpiles increased for the seventh-straight week. When those 

    Hello guest!
, some oil traders get spooked about demand at current prices and sell their positions...leading to a price decline.

3. Geopolitics are shaking things up. The Trump administration reimposed sanctions on Iran earlier this week...but announced waivers for eight countries, allowing them to keep importing Iranian crude for the next 180 days. You can put your fears of a supply squeeze to rest.

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Feels like up until today, there's been a red arrow tattooed next to "OIL" in the Brew's markets section for weeks—crude prices did 

    Hello guest!
 to their lowest in more than a year on Friday. But is that good? Or bad?

In one corner, the WSJ:

Their thinking? It's 

    Hello guest!

Follow us, here...A couple years back, supply ballooned (h/t shale production), prices fell, and investment dried up. Places like Texas and North Dakota suffered job losses, which in turn soured consumer spending. That was tough on the economy.

But that's not the case with this price drop...because 1) the oil industry now has a better handle on shale production 2) it reps a smaller share of capital spending in the economy and 3) it employs far fewer people. So feel free to enjoy the low prices at the pump without worrying about the economy caving in.

In the other corner, NPR:

Their thinking? A 

    Hello guest!
 is one thing (it's been a boom-and-bust industry since the first well was drilled in 1859)...but a drop in oil prices plusa stock market decline? That could signal global economic softening.

It could also ratchet up tensions ahead of December's OPEC meeting, when production cuts will be in the spotlight.

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    • By Money & Finance
      After World War II, a new international monetary system called Bretton Woods was created.
      Bretton Woods established three main things:
      (1) the U.S. dollar was to be an international reserve currency,
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      The world economy entered a new era: the US Dollar became the global reserve currency.
      The US made no effort to rein in deficit spending, in fact quite the opposite.
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      That is, the US needed more buyers for its debt.
      But by 1974, the enormous flood of dollars from the US into top-oil-exporter Saudi Arabia suggested a solution.
      That year, Nixon sent new US Treasury secretary William Simon to Saudi Arabia with a mission...
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      In return, the Saudis would plow billions of their petrodollar revenue back into US Treasuries and therefore finance America's spending.
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      And so the petrodollar era began.
      This petrodollar system has had massive implications for US foreign policy, which has essentially involved imposing 'freedom' on any major oil-exporting state that moves towards ending its reliance on dollars.
      In 2000, Saddam Hussein, then-president of Iraq, announced that Iraq was moving to sell its oil in Euros instead of dollars.
      Following a particular catalyst event in 2001, the US invaded Iraq, deposed Saddam Hussein, and converted Iraqi oil sales back to the US dollar.
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      But all else isn't equal, and the US has been piling on ever-larger amounts of debt in recent years.
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      In order to avoid a crisis, the US must ensure that interest rates remain low and that foreigners want to acquire both US dollars and US debt.
      Were petrodollars and petrodollar recycling to disappear, it would have a twofold effect on US government finances:
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      The result would be a budget crisis for the US government, as it would have to devote ever-larger amounts of the federal budget to payments on the debt.
      (The other option would be to have the US central bank monetize the debt by purchasing ever-larger amounts of it to make up for a lack of foreign demand. But this would lead to growing price inflation.)
      Furthermore, if participants began to exit the petrodollar system (and, say, sell oil in euros instead) demand for dollars would drop, exacerbating any scenarios in which the central bank is monetizing the debt. 
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      Anyone fancy a Great Reset?
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      Huge Debt Got Us Hooked on Petrodollars — and on Saudi Arabia
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    • By admin
      Here’s a metric Americans should start paying attention to: barrels per day.
      The U.S. is expected to pass Russia as the world’s No. 1 oil producer by 2023, according to a report from the International Energy Agency (IEA). Total U.S. supply will increase by 3.7 million barrels per day, which is enough to account for almost 60% of global growth.
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