What’s Behind (and Ahead for) the Plunging Price of Oil

It doesn’t feel like it, but we got a raise this week. The plunging price of oil, which prompted OPEC to announce a 1.5 million barrel a day production cut, has put money in the pockets of recession-worried consumers. “It follows that there’s going to be some spending effect,” said Francisco Blach head of commodities research at Merrill Lynch in London.



Oil demand in the U.S. has dropped 10% in the last few weeks, continuing a year long trend. According to the U.S. Department of Transportation, Americans drove 15 billion fewer miles in August, or 5.6% less than they did the year before. DOT says it’s the largest ever year-to-year decline recorded in a single month. Over the past 10 months, Americans have driven 78 billion fewer miles than they did in the same 10 months the previous year