For American consumers and companies of all sizes dependent on fuel, the collapse of oil prices in world markets has been a big positive.
The average U.S. price for a gallon of regular gasoline was $2.77, according to AAA, which predicts that prices could drop by an additional 10 to 20 cents.
As the Washington Post point outs, it’s not just U.S. motorists feeling the positive effects of plunging fuel prices. It’s also American companies. For example, every penny the price of jet fuel declines translates into a savings of $40 million for Delta Air Lines, the company’s chief executive told CBS recently.
“Every day, American motorists are saving $630 million on gasoline compared with what they paid at June prices, and they would get a $230 billion windfall if prices were to stay this low for a year,” the Post writes.
The benefits of lower fuel prices will help bolster the U.S. economic recovery, with lower-income households more likely to use money not spent on gas to purchase groceries, clothing and other goods.
The price of oil has declined about 40 percent since its peak in mid-June. It further collapsed last week after the Organization of the Petroleum Exporting Countries (OPEC) voted to continue to pump at the same rate.
Here are the losers in the arena of falling oil prices:
>> In the United States, oil services giant Halliburton has lost 44 percent of its value since the end of July. Continental Resources, a shale oil producer in North Dakota’s Bakken region, has lost half its value since Aug. 29. And BP has lost a quarter of its value in about the same time frame.
>> The annual revenue of OPEC members would fall by $590 billion at current prices.
>> Russia, with the value of the ruble crumbling, has seen inflation climb to more than an 8 percent rate and oil prices have done more to hurt the economy than Western sanctions.
>> Iran could see low prices intensify the effect of sanctions that have reduced the country’s oil exports in an ongoing campaign to pressure the regime into an agreement on its nuclear program.