After being around $107 a barrel in June, oil prices have dropped dramatically, with the price of a barrel of oil currently sitting at $81.69. Lower oil makes big oil and gas companies cringe, but there are plenty of companies that absolutely love lower oil prices.
We read a lot of headlines about falling oil prices, but where we really notice the drop is when we go to fill up our cars with gasoline. The cost of a gallon of gasoline hit a summer-time high of close to $3.70 a gallon, but it has been falling quickly, and is currently sitting at $3.03. Over the last month alone, the cost of a gallon of gasoline has dropped $0.31, and analysts believe that it could dip below $3 at the start of November.
There are several reasons oil is falling. For one, the U.S. is flooding the market with oil thanks to the current fracking boom the nation is enjoying. Another factor is heightened concerns over slowing economic growth in China. China is so important to the global economy that any hints of stalling growth in the nation are sure to send ripples across economies around the globe. Europe is also a concern, and last, but not least, is fear about the spread of the Ebola virus.
Any of the above factors would result in lower oil prices, but combined they have resulted in a huge drop in oil, and as a result gasoline prices.
What this all means is that people suddenly have a lot of extra cash in their pockets when they pull away from the pump. This extra cash creates a lot of discretionary income that retailers will all try to get their piece of during the coming holiday shopping season.
Lower fuel costs are not only beneficial to consumers and retailers, but also companies that operate in sectors with high fuel costs such as airlines and shipping companies.
A lot of companies are thankful for lower oil prices, but the following five stocks absolutely love lower oil prices.