WASHINGTON: With petroleum investment and the manufacturing sector sagging and the stock market in free fall, many Americans are wondering when they will begin to see the benefits of cheap oil.
Crude oil prices have tumbled by 70 percent since mid-2014, dropping this year below $30 a barrel, a price unimaginable as recently as 18 months ago, when they were at $110 a barrel.
The technological breakthroughs of hydraulic fracturing — or fracking — have revolutionized the market for black gold, making the United States the world’s leading petroleum exporter.
So why do things feel so bleak to many Americans? It may be just a question of timing, some economists say. “On a net basis, the decline of oil prices is or will be positive for the US economy,” said Angel Ubide, a senior fellow at the Peterson Institute for International Economics.
Because the negative impact is “faster and more concentrated in time,” people are already feeling it, Ubide. “If we look at it in two or three years’ time, we’ll be able to conclude that the decline in oil prices on net was positive. But we need some time for that.”