Low gas prices benefit consumers, not Wall Street
Jan 7, 2015, 2:04 PM | Updated: 2:04 pm
PHOENIX — Cheap prices at the pump are partially to blame for Wall Street’s rough start to 2015.
The Dow Jones Industrial Average dropped more than 300 points Monday and economists believe it is caused by the continual drop of crude oil prices as well as retail gas prices.
“It is movements in price like this that cause investors to have second thoughts and so you’ll see some selling of oil stocks and that’s brought the overall market down,” Dennis L. Hoffman, a professor at the W. P. Carey School of Business at Arizona State University, said.
Hoffman said when the price of crude oil dropped below $50 a barrel, it was bad for investors but a boon for consumers.
“Even though prices had started to fall due to lack of demand, they’re going to continually pump oil and allow prices to erode even further ,and what that does is it ends up delaying the investment cycle,” he said.
Arizonans can expect fuel prices to drop or remain steady for now, according to Hoffman. He also predicted a minor increase of the price of oil that should lead to more stability in the stock market, but will not weigh too heavily on consumers.
