What Cheaper Crude Means For Us!

OPEC (Organization of Petroleum Exporting Countries) has announced that it is slashing production of crude by 1.5 million barrels per day, beginning in November, in an effort to prop up a declining market. Crude is down over 50% from an all time high of over $147.00 per barrel in July of this year. A crude oil barrel is 42 U.S. Gallons. The greed of OPEC and Big Oil is evident in this latest move.

But what does lower crude prices mean for you? It means that in this declining economy your dollar at the pump goes further. It means maybe buying a chuck roast instead of hamburger. It means more money flowing into the economy. I've been saying for over 2 years now that the high oil prices would have a devastating effect on the economy worldwide and look what has happened! I blame the greed of OPEC, Big Oil and the failure of government worldwide to stem the tide of this greed as the key to our economic calamity.

Let's do the math. If you, average American, commute to work and you spent $40.00 (assuming a gas price of $4.00/gallon), 3 days per week for fuel, your weekly expenditure is $120.00. Multiply this by 52, which is $6240.00 per year. Now at the current market price of crude gas should be around $2.00 per gallon, so in the same period of time, at the lower price you spend half, $3,120. Now, let's assume that 50 million drivers in the U.S. see this savings. That's $156 Billion per year. Wow! What kind of economic stimulus is that! Now let's take it a step further, assuming that remaining 150 million Americans (not counting 100 million of the population to be conservative) who travel, drive and commute, experience a savings of 1/3 this amount $1040.00, you again have $156 Billion, times 2 equals $312 Billion. Almost half of the recent Emergency Bailout. Now take into account, all forms of transportation, reduction of cost of goods sold and generation of electricity is another savings of nearly $700 Billion per year, for a total of $1.012 Trillion annually. Again, Wow! That's $300 Billion more than the Bailout. Oh, and by the way, the average amount owed when a home mortgage goes into default is about $3,100.00.
DO THE MATH!

What we can do, is continue to conserve, make one trip count for many, put on an extra sweater and turn down your thermostat, get with friends and neighbors and carpool or rideshare for everything from going to work to going to the grocery. We can and must keep energy prices down. This is the one key thing we, as consumers, can do on our own to help bring back our economy.

One quick example, there is a fellow I know, who owns a local company that supports oil and gas activity. He employs 43 people not including himself. He has 30 vehicles from big trucks down to pickups, and other equipment that either runs on gas or diesel. In July his average daily fuel bill was nearly $4,000. DAILY! Now it's nearly half that. Which is a savings of nearly 3/4 of a million dollars per year. One small company, think of the new jobs, new investment in equipment and it goes on and on. How has high fuel prices affected you?