U.S. shale producers have helped to bring oil prices down, and American drivers are enjoying the fruits of those labors as they pay less for gas than they have in six years. As Bloomberg reports, Americans aren’t being shy about spending that money saved at the gas pump:
The lowest oil prices since 2009 translated into a $115 billion windfall for consumers last year, according to the American Automobile Association — about $550 per driver. Analysts say four-fifths of that cash got spent — often within a stone’s throw of the fuel pumps. Rather than buy a new sweater or a toy for the kids, motorists have spent much of the money at restaurants and bars, or on items purchased in gas stations such as cigarettes and salty snacks. […]
So far, restaurant companies have been the biggest winners, sucking in about 18 percent of the extra cash, according to a report by the JPMorgan Chase Institute, which analyzed 57 million credit and debit-card purchases. The next biggest share went to groceries, followed by entertainment. […]
“It is the lower-income groups who are eating out more frequently and pushing the sales in those categories,” said Tristano.
Financial advisors might be cringing slightly at how little of these newfound savings Americans seem to be saving, but for many families this extra cash is translating into some very concrete increases in quality of life. And of course the companies at which these drivers are spending that money will be hoping for gas prices to fall even further, in the hopes that their sales will see further increases.
Low gasoline prices come courtesy of low global crude prices, which themselves come courtesy of an oversupplied market. Producers around the world are fighting tooth and nail to protect market share, and prices don’t look likely to rebound anytime soon. Petrostates are feeling the pinch, but one thing’s for sure: American drivers won’t mind.