Plummeting Gas Prices Good For Drivers, Bad For Colorado Oil Workers
DENVER (CBS4) - Falling gas prices are a double-edge sword for Coloradans: Gas is cheap, but lower prices can negatively affect jobs in the state, where the oil and gas industry hefts a big footprint.
The price of U.S. crude oil dropped to $66 a barrel on Friday, down 30 percent over the last few months, because of a glut in supply. OPEC nations in the Middle East say they will not cut back on production, only adding to the increased supply.
But drivers like it.
"It's finally nice to be filling up and not spending $90," one said.
Many jobs, especially in Weld County, depend on higher oil costs. The Colorado Petroleum Association says if prices dip to $50 a barrel, that could mean layoffs. Less revenue also lowers tax revenue to local government.
Stan Dempsey with the association says the next few months will be telling.
"We'll have to look over the next few months to see how this shakes out, but generally the companies are cutting back their capital expenditures because of the lower gas prices," he said.
Analysts also say OPEC nations want to retain market share. By lowering prices, OPEC can drive out U.S. oil development because of how companies here respond by slowing operations.
