For the U.S. consumer the economic boost provided by lower gasoline costs is hitting at the perfect time. The Federal Reserve just ended their extensive QE stimulus program at the end of October with hope the economy could stand on its own.
Crude oil prices are extending their recent collapse heading into today’s U.S. session. The primary factors driving oil lower are the same ones your Economics 101 teacher droned on about during the first week of class: high supply (from Saudi Arabia increasing production) and low demand (from slowing economic growth in the Eurozone and China).
The eurozone countries have an imbalanced approach to jumpstarting their economies, relying only on monetary policy but failing to address fiscal issues such as punitive taxation and over-bloated entitlement spending.
As crude oil prices tried to bounce back from a five-year low, oil companies and OPEC try to adjust to low oil prices. BP earnings kicked off the big oil earnings season and they could have been worse.
The top Republican on the Senate Energy Committee urged President Barack Obama to end a 39-year ban on exports of U.S. crude oil, joining what is shaping up as an major election-year debate over energy policy.