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The Cost of Cheap Gas

THE MATH OF CHEАР OIL WHAT WE HAVE WHAT WE USE $120 CRUDE OIL, DOLLARS PER BARREL IN 2014 1 2 25M 4 DOMESTIC PRODUCTION SURGES DUE TO FRACK- IN THE U.S., LESS OIL IS CONSUMED ... ... THANKS, IN PART, TO AMERICANS' CHANGING DRIVING НАВITS ... WHILE OPEC STAYS THE COURSE OPEC, the Saudi- dominated cartel, historically calibrates oil prices by adjusting the supply. Despite the glut, OPEC has not limited $100 ING, WHICH EXTRACTS OIL FROM SHALE. THIS BOOSTS U.S. OIL RE- SERVES .. Miles traveled per person $80 2004 2014 13,182 12,071 production. Billions of barrels of crude oil $60 Miles per gallon, by vehicle model year (cars and trucks) 6.53% Total consumption of petroleum products, in millions of barrels per day $40 2004 19.3 Increase in world oil production from 2007 to 2013 2014 24,2 15 2009 2011 2013 National average prices for regular gas SHALE RICHES CREATED JOBS AND WEALTH. NOW THE STATE FACES LIFE AFTER THE BOOM JULY 2008 24 $4.06 TODAY $2.05 AVERAGE BARRELS OF CRUDE PER DAY Oil produced in ,the U.S. 10 М 8 Oil imported by the U.S. 4 2 Number of oil-drilling rigs in the U.S. in January 2015: U.S. INDIA CHINA SAUDI ARABIA Cheaper oil Every $1 drop in oil translates into $2.1 billion in savings for China, which could use the opportunity to phase out cheaper, Cheaper prices will mitigate the $10.5 billion the Winners 1,366 means consumers The wealthy nation will lose on low prices, but its competitors will suffer even more will have more cash, though domestic producers will hurt government spends on petroleum subsidies each 15% decrease from October $42.08 year dirtier fuels 2014, a sign of a slowdown in future oil production Losers CASHING IN THE DROP IN OIL PRICES IS EQUIVALENT TO A $125 BILLION TAX CUT. HERE'S WHAT THAT MEANS: IRAQ The country's battle against the Islamist insurgent group ISIS is costly and highly dependent on oil revenue IRAN RUSSIA The government predicts its economy will fall into recession VENEZUELA The country, which needs oil prices around $120 a barrel to balance its budget, risks defaulting on Oil prices may pressure Iran to reach a deal over its nuclear program in order to ease debilitating sanctions CONSUMERS GET A BREAK BIG CARS ARE BACK RETAILERS GET A LIFT amid tumbling oil prices and Western sanctions With heating-oil and gasoline savings, consumers have more cash for discretionary purchases its debt. $767 PERCENTAGE OF VEHICLES SOLD SALES INCREASES November 2013-November 2014: Expected savings in oil-heating bills this winter, due to milder temperatures and lower prices A LOOK AHEAD Profits, in billions: EMPLOYMENT WILL GO UP A bump in sales could encourage businesses to hire SUMMER 2008 AIRLINES WILL PROSPER Airlines still haven't lowered fuel (gas $4/gal.) 45% Trucks and SUVS 55% Passenger cars Restaurants 6% 300,000 Electronics and appliance stores 5% surcharges-and may not for another six months. Passengers will likely pay 2% more this year to fly on North American carriers even as airlines cash in. $7.2 $11.9 $13.2 Additional jobs expected to be cre- ated in 2015 due to consumers' TODAY 2013 2014 2015 (projected) energy savings (gas $2/gal.) 55% Trucks and SUVS 45% Passenger cars Clothing retailers 5% Sports, hobby, book and music stores 4% ILLUSTRATIONS BY BEN WISEMAN FOR TIME SOURCES: AAA; EIA; EPA; GOLDMAN SACHS; COLUMBIA UNIVERSITY; FEDERAL RESERVE BANK OF ST. LOUIS; MOTOR INTELLIGENCE; IATA; CENSUS Jan. Feb. March April May June July Sept. Oct. Dec. 19.121 23.267 30.529 20 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014

The Cost of Cheap Gas

shared by HeatherJones on Jul 14
It’s the biggest news in the global economy right now: oil is cheaper than anytime since 2009. And the impact is as obvious as the sign at the corner service station, where gas is down to an average...



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