Lower Gas Prices In America Essay Example | Topics and Well Written Essays - 500 words - 4

Lower Gas Prices In America - Essay Example The lowering of gas prices is an advantage to the America. The prices of gasoline have fallen from $3.68 in the mid-year to $2.77 on Monday, this is according to the auto club AAA analysis. The drop in prices should be a key boost at an era when growth abroad is faltering even though it may curb investment in the expanding energy sector. According to the IMF chief on Monday, she said that the falling oil prices will be of help in boosting the economies in the U.S and across the world. Lagarde also projected the U.S economy to grow at a 3.5% rate as at next year (Timiraos, 2014). The lowering of gas prices in America means that the people will have more to spend. It is apparent that Americans will have a bounteous Christmas due to the Saudi discounts from crude oil at a time of falling global demand. In my opinion, the American economy will get a multibillion-dollar increase during the Christmas season and beyond. The impact will be significantly more for the low and middle-income Ame ricans who have been left behind by the economic recovery that began in 2009. It is apparent that American household uses 1,200 gallons annually so if the prices continue to fall the people will save 15% that is about $400. In my opinion, this extra cash in shoppers will lead to a generation of half a percentage point in the economic growth at the end of the year (Schwartz et al, 2014). On the other hand, the falling oil prices will have a negative impact to the producers. The low prices will lead to slow domestic oil and gas production. Thus, dimming one of the economic bright spots of the decade. The low prices will also make it difficult for companies to explore costly oil shale deposits and the deep offshore reserves. The economists argue that the overall momentum will compensate for any expected slowdown in the energy sector.