News / Economy

Lower Oil Price Helps Consumers But Market Volatility Remains

Prices are shown as Jaqueline Henderson pumps gas at a station in Portland, Ore., Friday, July 29, 2011
Prices are shown as Jaqueline Henderson pumps gas at a station in Portland, Ore., Friday, July 29, 2011

Multimedia

In recent months, crude oil prices have experienced their sharpest drop since the 2008 financial crisis, and now stand at around $80 a barrel.

Alongside one of the main highways leading into the U.S. capital, a European tourist is filling up his rental car at a gas station.


Fluctuating prices

Felix Braz believes that lower gasoline prices will be shortlived.

"Of course, it will go back up because the needs all over the world are growing," he said. "And the reserves they are not growing and it's not very difficult to understand that one day or another we'll get short of gasoline."

Braz is from Luxembourg, where the price is almost double that in the United States because of fuel taxes.  

Another customer at the gas station is Jordanian-born Ahmed Al Hellu. He thinks gas in America is already too expensive.

"The other day I was talking to a friend in Qatar and he said the gallon is 75 cents, comparing to what we have here -- $3.99, almost $4.00 a gallon that's a difference you know. That's a pain in the pocket," he said.

Al Hellu runs an import business and says cheaper fuel would provide a much-needed break for him.

"Not only me. It will have a big impact on the whole country, because when the prices come down you have people transporting goods or things for their stores, the prices will come down, the wholesale will come down, the hotels, everything will come down, because everything is linked together," Hellu explained.

Since April, the price of a barrel of crude has dropped around $30. Economists say the price drop is linked to fears that a slower economy will lower demand for fuel.

Paul Isbell, an energy and climate expert at the Inter-American Dialogue in Washington, blames uncertainty in Washington and the recent downgrading of the U.S. credit rating.

"The main cause of this is the sudden kind of sense of incredulity at what's been happening in the United States," he notes.

But that's only the latest factor that has caused extreme price volatility, he says. In 2008, the price plummetted during the global financial crisis after peaking at nearly $150 a barrel. The tsunami in Japan and uprisings in the Middle East also have affected the oil price.

Isbell says price shocks hurt the poor the most and argues that European-style gasoline taxes can function as a tool that cushions the shocks while slowing climate change. He says governments can raise or lower the tax to compensate for price fluctuations.

"We have to stop thinking: High oil prices - bad; low oil prices - good," he said.

He says oil prices that are too low can have the effect of a tax break for consumers, but  leave them vulnerable to a price shock down the road.


Jerome Socolovsky

Jerome Socolovsky is the award-winning religion correspondent for the Voice of America, based in Washington. He reports on the rapidly changing faith landscape of the United States, including interfaith issues, secularization and non-affiliation trends and the growth of immigrant congregations.

You May Like

Video Experts Warn World Losing Ebola Fight

Doctors Without Borders says world is losing battle against Ebola, unless wealthy nations dispatch specialized biological disaster response teams More

Video Experts: Rise of Islamic State Significant Development in Jihadism

Many analysts contend the group - which grew out of al-Qaida in Iraq - has been rebuilding for years More

US-Based Hong Kongers Pledge Support for Pro-Democracy Activists

Democracy advocates call on Chinese living abroad to join them in opposing new election rules for their home territory More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Larger Than Life Chinese Lanterns Make Southern California Appearancei
X
Elizabeth Lee
September 02, 2014 8:57 PM
Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Larger Than Life Chinese Lanterns Make Southern California Appearance

Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Experts See Rise of ISIS as Significant Development

The Islamic State’s rise seems sudden. It caught the U.S. by surprise this summer when it captured large portions of northern Iraq and spread its wings in neighboring Syria. But many analysts contend that the group - which grew out of al-Qaida in Iraq - has been rebuilding for years. VOA's Jela de Franceschi takes a closer look at the rise of ISIS and its implications for the Middle East and beyond.
Video

Video Israel Concerned Over Syrian Rebels in Golan

Israeli officials are following with concern the recent fighting between Syrian rebels and government forces near the contested Golan Heights. Forty-four U.N. peacekeepers from Fiji have been seized by Syrian Islamist rebels and the clashes occasionally have spilled into Israel. VOA’s Scott Bobb reports from Jerusalem.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.