Top Zacks Rank stock picks show 3 clean ways oil prices clearly benefitted the U.S. —
First of all, as gas-at-the-pump prices fall, convenience stores, aka those retail goods placed at the point of sale, or in close proximity to gas pumps, reel in that extra cash found in the pockets of U.S. consumers.
Suddenly, trips to the beach for some sun, or that trip to go skiing, or a long-planned tour, become more affordable with cheap gasoline prices. The cheap euro makes a European vacation affordable. Ditto for the Canadian dollar and Mexican peso. A group of U.S. or foreign companies provide cheaper transportation services to these plane travellers and car drivers.
Lastly, supply curves fall. Companies can earn a nice oil price windfall. Notably, those with large unit costs (30% to 40% of the total cost) incurred making products using oil as a raw material. These companies can reap this windfall in the form or higher profits, or pass it on to their customers in the form of lower prices. The latter grows their selling volumes and revenues.
Leave A Comment