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Friday, May 11, 2012

For now, the laws of supply and demand rule in favor of lower oil prices

Observation:  A story in yesterday’s Wall Street Journal explains that OPEC is operating at greater than their usual production, which should have the effect of continuing our recently stabilized gasoline prices.  The production was increased in response to geo-political issues such as the uneasy situation in Iran.  Click here to see the story.

Implications:   This winter, I think many consumers had braced themselves for higher gas prices in the foreseeable future.  The recently stabilized situation with petroleum raises an interesting question:  What if you prepare for the worst and hope for the best… and the better outcome turns out to happen? 

Does your company, product or service stand to benefit from the “dividend effect” of households that will spend less on their daily commute?  Again, if the consumer is spending less than anticipated on fuel, they have more to spend on…


Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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