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Oil Wars: Low Gas Prices Have Saved Consumers At Least $50 Billion
Thomas Miller: Lest we be too quick to forget whence we came, America is now 9-months into lower gasoline prices, which started their swoon the week of June 30, 2015 from a lofty national average just under $3.70, tumbling almost every subsequent week before bottoming and bouncing from $2.02 the end of January, according to gasbuddy.com.
It is estimated that for every penny gas goes down, consumers collectively save $1 billion. Therefore, the 2014/2015 drop has accounted for at least $50 billion in your pocket and mine. Well, maybe a little less than that in each of our pockets, but the national average is about $500 bucks per family. The question begs then, has that money shown up in other parts of the economy?
Dr. Bernard Weinstein, Ph.D., Columbia and Associate Director of the Maguire Energy Institute at the Cox School of Business at Southern Methodist University in Dallas says it has: “No question we’re seeing the effects of lower oil prices throughout the economy.”
On the economic front, although retail sales were not as strong in December and January, most analysts are shrugging it off as a temporary blip. The manufactured durable goods number in January did tick up slightly more than expected, with nearly a 3-percent increase. Interestingly, with fuel prices lower, the Ford F-Series, Chevy Silverado and Dodge Ram trucks have been the top three selling vehicles (in that order) since September, 2014.
The usual beneficiaries of lower oil prices are still benefitting: Transportation, airlines, power generators, refiners and any business directly using oil or natural gas for fuel or feedstock.
However, the decline continues to hammer drillers and producers hardest. As of last week, according to Baker Hughes, there are 687 fewer rigs drilling for oil than the peak of last October, now up to a 43% decline. Drillers, and those who found in-demand and high-paying jobs over the last five years exploring for oil and gas, are impacted the most. It is now speculated that
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Source: http://marketdailynews.com/2015/03/12/oil-wars-low-gas-prices-have-saved-consumers-at-least-50-billion/
