However, on the flip side, low prices mean that producers are not drilling more wells, and it makes some more environmentally harmful types of oil – such as the oil sands in Canada – less cost-effective. So the environmental impacts of lower oil prices are not cut and dried.
Tom: Now for the good news – there is good news, right?
Mellody: There certainly is good news, and I mentioned one of the big positives a bit ago, Tom: lower gas prices. While that may cause people to use more gas, in the U.S., rather than increasing people’s usage of gas, it generally just saves people money. The rule of thumb is that for every one-cent drop in gas prices, Americans save $1 billion. Since this time last year, gas prices have dropped by $1.04 nationwide. That is $104 billion back in consumer pockets that they can save or spend, and that’s a big deal. Consumers also benefit from lower energy prices in other ways as well. In the Northeast, heating oil will be much more affordable this year, and both consumers and manufacturers alike will see savings from lower transportation costs for goods.
Tom: Great to know! Thanks for joining us, Mellody!
Mellody: Great to be here, Tom!
Money Mondays: Lower Oil Prices And What That Means For You was originally published on blackamericaweb.com