Falling gas prices benefit new drivers
February 12, 2016
Driving is the ultimate freedom a person can have. When most people get their license around the age of 16, an expense they have to worry about is paying for gasoline for their car. Now prices are the lowest in the past couple of years, and with new drivers on the way, it is a great time for them as they do not have to really have to worry about high prices for gas. The drop in oil prices can have a major effect on the economy as a whole, and what that means for the everyday consumer.
As gas prices are falling it is good to look at why this is happening and how gasoline is produced. Crude oil is produced by pumping it from the ground. Most oil from the ground is from oil fields from around the world, usually in the Middle East. With the crude oils out of the ground, it is sent to a refinery which turns crude oil into gasoline, which is put into barrels and are sold per barrel. The price of each barrel is usually what determines the price of gas at the gas station. The price of oil is around $30, but according to the New York Times the average for a barrel of oil in the U.S in 2015 was $34 to $36. With how gas prices are going right now it will most likely rebound to at least two dollars. It is still cheaper than in the past, but it is healthy enough for both the consumer and the oil business.
These prices are a welcomed change because families do not have to worry about excessive gas prices from the past. According to statista.com, the number of licensed drivers in the United States were around 210 million, so with low gas prices for all drivers, it will greatly effect how much money will be made at gas stations around the country. Also with teens heading out in a car with friends more often, it is a welcome site to see that gas is not to expensive.
With gas prices around $1.79 at a Stillwater Holiday Station, prices are great for drivers new and old. There is one side of this story that is not really being shown. Not only is the oil industry not doing well with these low prices, it is very much hurting the economy. Within the past few weeks, 40 different oil companies have gone into bankruptcy protection according to the New York Times. The oil industrys have had a huge fall from the summer of 2015 where barrels were selling at around $34 to around $30 a barrel. Also, according to BBC , U.S oil companies need the economy to rebound because these companies have a lot of debts by just entering the business, and if these businesses fail there will be many layoffs from many Fracking companies. Until we find a new source of energy or we hit a time where we just run out of oil, we need to help keep this industry booming, not only for the jobs, but to help keep the one energy source mostly used in cars going until more cars run on electricity.
The oil industry will most likely rebound. But until it does, most people will be happy with the low prices at the pump, especially if the drivers are young, new drivers. But again, the oil company will rebound, and prices will most like be around two dollars within the near future.