Peyton Adams
Mr. Reuter
Economics
11/30/15
Gas Prices At Lowest Prices Since 1999. Winners and Losers
Stopping at the pump doesn’t empty your bank account as much as it used to in previous months.The New York Times states,”Earnings are down for companies that have made record profits in recent years, leading them to decommission more than half their rigs and sharply cut investments in exploration and production. More than 200,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply”. The reason behind the drop is the United States is starting to produce our own oil which is causing competition between countries such as Saudi Arabia, Nigeria, and Algeria causing them to drop prices. Americans are also demanding less oil due to more energy efficient cars. Due to the drop households are expected to spend $750 dollars less on gas this year (“Oil”). This money can be used for other things that will help suppliers during the holiday season because people will have more money to spend that they did not have before. 
Some of the losers of the low gas prices are going to be the countries that have main exports of gasoline: “. Venezuela, Iran, Nigeria, Ecuador, Brazil and Russia are just a few petro states that will suffer economic and perhaps even political turbulence. Persian Gulf states are likely to invest less money around the world, and they may cut aid to countries like Egypt”(“Oil”). Other people that are suffering from the low cost of gasoline are workers: “Chevron and Royal Dutch Shell recently announced cuts to their payrolls to save cash, and they are in far better shape than many smaller independent oil and gas producers that are slashing dividends and selling assets as they report net losses”(“Oil”).
Oil prices are not likely to recover anytime soon and although they benefit the consumer many suppliers are trying to prepare for the worst and lay-off many people so they can survive the bust in the oil market.
Works Cited
Krauss, Clifford. "Oil Prices: What’s Behind the Drop? Simple Economics." The New York Times. The New York Times, 5 Oct. 2015. Web. 1 Dec. 2015.
It's somewhat surprising to me that prices haven't been this low since the late '90's because of how often gas prices change. It seems like every week is completely different than the last. As for the oil market, nobody really hears about it much other than when there is a surplus or shortage in supply. We don't usually think about the people working these jobs so hearing about how it affects them gives the prices almost a new meaning. Also, everyone likes having more money because of additional savings.
ReplyDeleteOil is a commodity that nowadays we simply cannot live without. Petroleum oil is used to fuel many things we as human beings deem essential for civilization; specifically, cars. Often people have disputed and raged about increase in gas prices and to some extent, consider it a catastrophe if they raise too high. As a driver, this new gas price low in 16 years can only be a good thing. While yes, people may lose their jobs in our country as well as others, It is necessary for the greater good of the United States by having those tens of millions who drive pay much less for gas. Not to say that people losing their jobs is a good thing, but in this day in age it is near impossible to progress without sacrifice.
ReplyDeleteWith gas prices so low are there questions as to them ever rising again. As the price drops more people will be able to afford gasoline and even with the increase in fuel efficiency perhaps people will drive more and carpool less. This increase in demand could lead to rising prices with would set us off in the other direction again. Its nice for the consumer with the low prices but we could just be at the bottom of a viscous cycle.
ReplyDeleteIts good that gas prices are low as it gives people more of an incentive to go out and drive more but the fat that multi-million companies still have to lay off workers and sell their shares to still make money. But if you really want to save money on gas then you should bike and walk everywhere like me and save that extra $750 for something else.
ReplyDeleteit is definitely an advantage for the consumer that gas prices have dipped so low and are expected to continue to do so. Because we are finding oil in the US we no longer have to import as much as we did before cutting down on import prices. In addition, due to the lower prices, most people won't be as frugal with their gas, thus they will drive more and their may be an increase in demand. In addition, these low prices have most likely caused an increase in quantity demanded. I wonder if these low gas prices will have an effect on the price of airline tickets?
ReplyDeleteIt is surprising to me that today's gas prices are the lowest now that they have been since late 90's. Gas and oil are something that will always be needed. I can see the decrease of demand for gas though with cars now a days being more efficient and using less gas. Even though the drop in price leads to less jobs and not as many opportunists for Americans and people working in this field. It is a great thing for everyone since gas is cheap and it makes it easier for people to get around more often.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteIt is very interesting that the decrease in gas prices has caused many people working for oil companies to be laid off because of the lack of profit. I would have thought that is was cheaper to purchase oil because of the recent supply in the US and this was the reason that gas prices were lower than normal. On the other hand many consumers are very happy about the drop in gas prices especially for long distance commuters because gas does really add up. Plus a little extra money around the holiday's doesn't hurt either. Overall the decrease in gas prices which caused many oil workers to be laid off was very interesting.
ReplyDeleteI honestly think it is about time that prices went back down, because if you think about it all these monopolistic competition companies raise their prices. They charged high because they knew we didn't have any other choices so they knew they could screw us. Now that we are starting to produce our own we don't need to worry about them as much and now they are extremely worried, and are trying to lure us back in with low prices, but as soon as we give into them, prices will go right back up. Overall, I'm glad that prices are low, and that America is finally becoming independent towards the oil companies overseas.
ReplyDeleteThis drop in gas prices has helped out the local consumer, but not the oil workers. Although some oil workers lost their job, providing ourselves with our own oil is building our economy. I personally like that fact that we are able produce our own oil as well as purchase it overseas. Another interesting thing about this is the foreign affairs. If we can produce oil, we don't need to rely on the middle east, an area we haven't had the best relationship with. Overall this is a very interesting and important topic.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThe decrease in oil prices have lead to a decrease in over all gas prices which has benefited consumer consumption of the product, but is drastically negatively affecting the oil workers due to the decreased reliance on importing oil to the United States. Since we are gradually starting to produce oil in America we are allowing our economy to steadily improve. The fact that we are able to produce oil in our own countries and get oil from over seas, I believe it will only benefit us with not being dependent on one single place to get our oil from. Also with our relationship with the middle east not being the best, we can rely on our own country for oil production. Overall, I'm happy that gas prices have decreased and that America is producing it's own oil.
ReplyDeleteAs there is a decrease in gas prices consumers are not spending as much money towards gas. This then is going to all consumers to have more money which will also allow them to spend more. Due to more spending power this will then increase the sales for different stores. One thing that you should add is when you talk about how there were 200,000 jobs lost to add where the Jobs were lost. Was it in the overseas countries? And how will the job loss affect our country?
ReplyDelete