CNNMoney.com — By the mid-day the oils prices will reach $120 and the gallon price will low down to $4 or may reaches $3.5, most of the Americans were relieved by this news; but is this a good signs reflecting the future of economy and during the financial crisis.
“There is no doubt that with gasoline prices dipping below $3.90 a gallon we have a bit of a reprieve on the energy front,” Merrill Lynch economist David Rosenberg wrote in a report Monday, “but the reality is that this is a chicken and egg game because the decline is reflecting the consumer recession.”
Customers decreased their spending which led to the sharp fall down of prices, and with the ongoing period of economic weakness due to the events around; costumers will going to reduce their spending more.
May’s decline was the third-largest monthly drop on record since 1942, says Stephen Schork, editor of the Schork Report energy and shipping newsletter in Villanova, Pa.
Americans are business today, economy news, financial crisis, low oil prices, oil prices than they were a year ago, Rosenberg writes, while energy use in inflation-adjusted terms has dropped 2% – an event he calls “extremely rare.”
However, this may not a good sign for most of economists but it may encourage people to drive more and return to deal with the market again, also it may lead to encourage them to pay their loans for banks and relief their debts.