Greece is Crumbling
Greece is crumbling and that is the bad news, but the good news is that gasoline prices are falling as well. It is all about exposure and exposure to European banks. Despite some great, non-deflationary US economic numbers, fears of the worst case scenarios from Greece steam rolled the markets once again. Stronger than expected economic reports in the US yesterday like the ISM and strong auto sales seems to suggest that despite our worst fears, the US is not in a recession. Well, not yet anyway.
Consumers are getting a boost as gas prices continue to fall! The Energy Information Agency reported that the US national average price for regular gasoline fell 7.6 cents, hitting $3.433 a gallon. Still it appears that while the market frets about Greece we may see even more selling.
My take on gas is that we could be headed much lower on the retail side. Because prices were high all summer due to a multitude of factors that have now gone away, we should get a bonus with a significant downward correction. Demand destruction that was created by the unusual factors that kept prices high like floods, war, hurricanes and tropical storms will only be corrected by a large drop in price.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.