Oil Prices Drop

While you slept the price of gas at the pump fell a nickel overnight. the national average is now 2-99 a gallon.
Even cheaper in some places, $2.18 at one station in Aurora Missouri.
Consumers have a right to feel giddy. Fewer dollars spent at the pump could mean more spending at the mall.
David Wyss, Chief Economist, Standard & Poors, says, " The amount of money consumers will save from lower oil prices is roughly the same as the stimulus package we got in 2008, so that's a significant boost to consumer purchasing power. "
But - and it's a big but - that's only if the price of oil remains this low, around 70-dollars a barrel.
Some consumers say they can't see it staying this way.
OPEC agrees. Oil ministers will meet in vienna next friday to cut production in hopes of forcing oil prices higher. But it's a tightrope act.
Phil Flynn, V.P., Energy Analyst at Alaron Trading says, "If OPEC cuts production and damages the world economy well they're not going to sell as much oil and prices will fall anyway."
The economy these days is already an ugly picture. People are losing their homes at record rates. Manufacturing is slowing down everywhere.
Jobs in the U.S. are vanishing faster than magicians' rabbits and the jobless rate is all but certain to rise.
Peter Buetel, President of Cameron Hanover says, " If you see somebody or have heard of somebody who's lost their job you first reaction isn't to go out and spend like a drunken sailor. "
Not when many economists believe we're in a recession.
Wyss says, "We're going to stay in a recession I think until the first half of next year. But lower oil prices mean it'll be a little milder recession that it would have been otherwise. "
Just 3 months ago gas averaged more than 4-dollars a gallon. Hard to reckon that today's prices would be cold comfort.
The average cost of a gallon of regular gasoline fell below the $3 mark for the first time since mid February.


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