Oil prices have dropped almost 40% since June of this year. We recently wrote about this HERE. You can see in the chart below that the break below $80 a barrel was significant. This negatively impacts the oil shale industry here in the U.S., however consumers will benefit from lower prices at the gas pump. Because of the drop in prices, estimates have ranged between $100 – $140 billion on the amount of dollars the U.S. consumer will now have to either save, spend, or invest. This in many ways is the equivalent of a tax cut, however without the increase in government deficit spending. This is also a positive geo-politically in that some of the more troubled areas of the world (Russia, Venezuela, ISIS, etc.) rely heavily on high oil prices to fund their operations. This drop in price hurts those regimes. So for the time being, enjoy this tax cut and the more money in your pocket.
Click on chart to expand.