» Insights: How Much Could Lower Oil Prices Help? Decision Economics

Insights: How Much Could Lower Oil Prices Help?

Posted June 27, 2012 by Editor


  • Slower U.S. and global growth have helped push down gasoline prices, which have fallen significantly from a recent high of $4 per gallon.  If oil prices stabilize at $80 per barrel, gas prices could fall to $3 or less, the lowest since 2010.
  • Lower gas prices could free up over $100B in consumer spending power, or as much as 0.7 percent of GDP.  Since about half of U.S. oil consumption is domestically produced, lower prices could boost GDP by nearly 0. percent4.
  • While the direct impacts on household income are significant, the indirect boost on consumer confidence could be equally important, giving additional support to Decision Economics’ view of a sustainable but slow expansion.