Who Should Enjoy Low Gas Prices?
Consumers are rejoicing that gas is now selling at a three-year low of $3 a gallon.
The question this situation raises is should people really be happy? There is no simple answer. It depends who you ask. Individual consumers and industries that rely heavily on gas are happy that the price is now so low.
But this isn’t exactly happy news for the oil industry, currently the biggest job generator in the United States and Canada. There are a number of reasons that gas prices are so low. One of the main reasons is that there is an excess of supply in the market now, unlike several years before.
In the US, the industry boom is due to a technology called fracking. Because the US is now a net producer of oil, analysts say oil producers in the Middle East are flooding the market with greater supply to push the price of their oil down and to effectively keep the demand up.
By keeping the market share, oil producers from other nations are preventing investors from pouring more money into oil exploration and infrastructure projects in the US.
What do you think?
Terry Smeader
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