With falling temperatures this winter, has also come steeply falling gas prices. The gas prices have been steadily falling since 2015, and are most likely to continue. However great this may be for teens with minimum wage jobs, many adults comment how low gas prices are not a good sign for the economy. Is this true? How could it be when it is saving Americans hundreds of thousands of dollars each month?
The answers to these questions are not simple, and involve many more countries than just the United States.

The simplest answer is supply and demand-many countries, such as the US and Europe, are just not demanding as much oil as they used to. Cars and other motor vehicles are becoming more energy-efficient, therefore our demand for oil is dropping. However, the Organization of Petroleum Exporting Countries (OPEC), the leading suppliers in oil for the world, is not decreasing their production. Pair that with the fact that China, Europe, and the United States are increasing their own supply of oil, and you get the perfect conditions for oil prices to begin and continue dropping.

Although this does not seem to hurt the United States economy (which, unfortunately, is not the truth), the OPEC nations are getting pummeled as they continue having to drop their barrel prices. Many of these countries, such as Russia, Iraq, and Saudi Arabia, have economies that rely heavily on oil. If the prices continue to drop, their economies could be in extreme danger.

However, we are not in the clear either. If the United States starts cutting back on oil production, hundreds of thousands of people will lose their jobs. Many companies are starting to go into debt, and could even go bankrupt in the coming year. The United States has been producing more of its own oil than it has in the past 30 years, competing now with OPEC. That is exactly one reason OPEC has decided not to cut production, because they do not want America to start controlling the oil industry/economy.
Another factor is competition-the market for oil is expanding past just OPEC nations. Now the United States, Europe, and Japan are producing more oil for themselves, and selling it. Again, the demand from OPEC nations is decreasing; however, they are not lowering their production in an attempt to keep other nations from taking more of the share of the oil industry from them.

So the next time you go to pump gas and fill your car for under $20, yes, you are allowed to celebrate. It is great for American families right now, who are getting major savings each month from the falling prices. However, the long term affects are starting to take place-economies are starting to feel what this drop means, and some households could be feeling these effects soon. A little drop in prices never hurt anyone, but these massive changes could possibly upset an industry more than it has since the 1990s.