Falling Crude Oil Prices Great for US Consumers and Emerging Markets
US Holiday shoppers should enjoy more spending power thanks to the recent dive in Crude Oil prices.
While this fall in Crude Oil prices does not yet match the Ys 2014-2016 fall to $26 bbl, the current decline should soon make itself felt through the global economy.
ICE Brent Crude Oil has fallen under $65 per bbl from a 4-year high in early October over $86, and NYMEX WTI Crude Oil has dropped below $55 bbl.
Retailers in the US, who depend on heavy Christmas spending, should see a boost as lower gasoline prices give consumers more cash to spend on gifts.
The average price of a gallon of regular gasoline in the US has fallen to $2.60 from $2.85 a month ago.
The President, who had criticized OPEC during the run-up in Crude Oil to above $80, also thanked Saudi Arabia for the recent drop in the price.
Along with the US and Russia, the Saudis had boosted Crude Oil production in anticipation of sharply lower exports from Iran, due to pending US sanctions. But President Trump added a 6-month waiver for several countries that are major consumers of Iranian Crude Oil when he imposed the sanctions on 5 November.
Instead of spiking, Crude Oil prices dove into Bear market territory. Concerns about slowing global growth and weaker demand have also weighed on prices.
The IEA says abundant global Crude Oil supplies should be welcomed as insurance against market volatility. It says lower prices are also a big break for people in developing countries who have seen fuel prices rise due to a stronger USD, the currency Crude Oil is denominated in.
To all of our subscribers and readers in the US, have a Happy Thanksgiving Holiday!