Yesterday I commented on falling oil prices and the potential effects on investment in efficiency and alternative fuels. Now, the Washington Post has an article saying the low price of gasoline is spurring new consumer interest in SUVs—Lincoln Navigators, Ford Explorers, and even used Hummers.
The Post estimates that the 20% slide in gas prices since June has saved the average driver $520. And New England homeowners who heat with oil could save about $360 this winter. In addition to showing renewed interest in larger vehicles, consumers are spending their oil and gas savings on eating out, entertainment, clothing, and electronics—giving a boost to some segments that have been sluggish, according to Barclays, as reported in the Post.
Airlines too will benefit. According to J.P. Morgan, airlines could save about $5 billion on fuel in 2015, although they might not pass the savings on to passengers.
The Post suggests that oil producers including those in the Middle East have an incentive to keep oil prices temporarily low to generate demand.
Read my post from yesterday here, and read the Washington Post article here.
