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Byron King.
Posted Jan 22, 2015.
It’s hard not to notice it at the gas station. Oil prices have plummeted. They’re sitting at levels we haven’t seen in years.
Of course, this is great news when you’re filling up the tank. I saw one estimate that today’s prices will put about $750 “extra” into the pocketbooks of every household in America. That’s the equivalent of a national tax cut.
These low prices are also great news for businesses that depend heavily on oil. The bottom lines of airlines, trucking companies, even cruise ship companies will directly benefit.
For investors, however, the situation is a bit more complicated. The effect of low oil prices obviously depends on what’s in your portfolio. One thing’s for certain, however: Oil market gyrations touch everything. So you have to either figure out how to ride the train… or get crushed beneath the wheels.
How long can you expect low oil prices to last?
Yes, as a consumers, you want to see low prices at the pump. But for investors who’ve been riding the American fracking boom, are these low prices a death knell?
To address these questions, you first have to understand why oil prices have fallen so dramatically since mid-2014.
There’s no better place to start than with an event that occurred this past Thanksgiving involving OPEC.