The Impact of Oil Prices on the Market and America’s Wallets
- Mar 23, 2015
- Marc Fogarty
The American production of oil continues to outpace the rest of the world despite instability of market prices. The price per barrel of oil hit a six-year low in January but has gone back up recently due to high global demand and colder than usual temperatures in the Northeast U.S., which increased demand for heating oil.
While Wall Street may be nervous about the negative impact of the instability of oil prices, consumers and businesses that are able to take advantage of lower prices at the pump can use those savings to spend more and possibly invest more. When gas prices fall, consumer confidence rises.
In addition to the benefit of consumers having more money to spend on goods, businesses also benefit from reduced expenses. When gas prices decrease, retailers can save money on shipping and transportation costs which leads to higher profit margins. Those higher profits can, in turn, make the company more attractive to investors.
While Americans continue to debate the pros and cons of oil production issues, Saudi Arabia and its Gulf allies claim to not be worrying about news headlines on fluctuating oil prices. Their per-barrel production cost remains much cheaper than many of their competitors and they are focused more on protecting their global market share.
In the meantime, Americans can continue to enjoy the benefits of cheaper prices.
What's on Your Mind?
Marc Fogarty, Audit Partner and National Biotech Sector Leader, within Technology and Life Sciences Group, and member of the firm's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.
Start a conversation with Marc
Explore More Insights
It's Not You, It's Your Software | Embracing the Future as a Digital CFORead More
Proposed Regulations for Determining Proceeds, Basis, and Reporting Requirements for Digital AssetsRead More
Receive the latest business insights, analysis, and perspectives from EisnerAmper professionals.