When the public gets a big drop in the price of oil, it is generally thought to be considered as a pay raise for Joe Public. The problem comes into play when the drop is because the economy is weakening enough that it creates demand destruction. We have seen a serious drop in the price of oil and crude oil futures have now broken support.
Today's drop in December Crude Oil Futures at the NYMEX is by another $1.90 to $86.75 per barrel. That breaks it under what was supposed to be prior support of about $88.00 and it takes us back to the lowest level since early July.
The good news is being seen at the pump as gas stations are finally having to cut their prices. The drop is now being seen in Los Angeles, Houston, Chicago and elsewhere. Here is a basic chart showing all of these against crude oil prices over the last month from GasBuddy.com.
The average price of gasoline in Houston was $3.39, which is the same as the $3.39 average for the entire state of Texas.
The average price of gas in Los Angeles was $4.41, versus a California average of $4.35 per gallon.
The average price in Chicago was listed as $3.77, versus the Illinois average of $3.618 per gallon.
Today's national average is listed as $3.65 per gallon.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Economy, Oil & Gas, Retail