Nov 23, 2015

Gas below $1? Good or bad?

The impact of lower gas prices on the economy can be seen in two ways. One; on the industry related - energy, and the other on the broader economy.

Obviously the impact on the energy sector is negative and the related mortgage industry is going to be negatively impacted (states/regions that have a positive correlation with the amount of money being spent on energy).

The broader economy will have a positive impact, due to the fact that people are going to have more disposable income from the lower prices they pay at the pump; and also hopefully the lowering of inflationary pressures due to lower transportation costs. The second factor has the potential to improve the entire consumer centric economy. 

A recent article in 24/7 Wall Street/USA today questions whether gas would go below $1 a gallon in states that have lowest taxes today and have refiners that have excess capacity.

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