The state of oil markets are in a tricky place right now - after several years of steady price increases, the strength of gas economics may finally be losing its oily sheen. With the United States catching up to Saudi Arabian and Russian oil powerhouses in terms of production, global supply is finally surpassing demand in such force that gas prices have been in a free fall over the past several weeks.
The effect of this shift has both positive and negative consequences: For American consumers, money saved filling the gas tank means more flexible cash to pump into the economy, boding well for a strong holiday season.
On the other hand, a surge in the oil & gas "fracking" industry in recent years has created thousands of jobs mostly in Colorado, Wyoming and North Dakota. If prices continue dropping too precipitously, demand for these jobs could also go away.
As of Tuesday this week, crude oil prices finally stabilized after an extended dropoff, also lifting up oil & gas stocks.
An additional point of concern is the state of Russia's economy, affected by lower gas prices and other political problems. More broadly, Russia figures to be a huge player in the European economic balance, so financial woes for Russia also mean potential financial woes for all of Europe.
With all of these changes in mind, it will be telling after the holidays how the U.S. economy holds up in light of oil prices and the global marketplace. Stay tuned to our blog for updates.
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