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Gas drops below $2 per gallon

Posted on 1/6/2015, 12:11 PM

Anyone who filled a gas tank in the last two weeks is smiling — or perhaps should be.

The lower gasoline prices are putting serious cash back into family budgets nationwide.

There are analysts who say this will hurt the economy overall since so many 401K funds are heavily invested in energy stocks negatively impacted by the crash of the oil price.

Oil was selling at $50 per barrel Monday. A year ago it was at $90 per barrel and some analysts say it will not bottom out until it is close to $35 or $40 per barrel.

“These price reductions are a bit like a tax cut,” said Raymond James Financial Adviser Michael Tison. “It leaves more disposable income in family budgets. Commodity prices like oil are transitory and nobody knows how long the price will remain low. Commodities have a ‘U’ shape recovery when you view them on a graph. There won’t likely be a ‘V’ shape recovery in oil,” he said.

In other words, when gas starts going up again, it won’t be sudden.

“Sales and consumer purchases should recover while the oil price is low. Transportation, like airlines will do better, the travel industry will fare well and that means more visitors to the Shawnee National Forest,” Tison said.

Tison said the fracking process in oil and gas exploration has contributed to this decline in the barrel price of oil.

“But as the drillers park their rigs due to lower prices the drilling and exploration will slow a bit,” he said.

“The entrepreneurial spirit here in the U.S. is strong. We are still relatively unregulated by government when you compare us to Venezuela, which is nearly bankrupt and yet rich in natural resources. There the government controls the means of production and the citizens do not do well.

“The private sector is more efficient than government.”

Those who believe state government will raise gas taxes in light of the reduction of price pressure on gasoline consumers might be encouraged by news from Saline County Engineer Jeff Jones. Jones said his professional association had not notified other engineers or himself of any pending legislation to do that soon.

“Our association of county engineers has not forwarded us any emails about a bill to increase gas taxes,” he said.

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