Oil prices, perhaps fittingly, ended the year with another drop. The 1 percent decline came after news of (even) more supply than we expected and (even) weaker demand. For the year, oil prices are down by half.
“Let’s say you bet on oil prices rising, you just got two more lumps of coal in your stocking as far as data,” says Marketplace’s Scott Tong.
Chinese factories appear to have slowed down, and they buy a lot of oil. And the amount of petroleum on the shelf in storage in the U.S. went up. The price of oil is at its lowest in five years. “And if we measure it in terms of gasoline, the last time it was $2.30 a gallon nationally was the summer of 2008,” Tong says.
Last quarter, the U.S. economy grew 5 percent. So cheap crude can be seen as a good thing for those in the airline, travel and hotel industries. It also helps consumers who still carry cash in their pockets. “If we look globally, the emerging locomotives of China and India, they rely a lot more on energy to grow,” says Tong. “This is a bigger boost for those countries than it is here.”
But, there’s also losers. Electric vehicles, alternative fuels and oil producing countries and companies are hurting right now.
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