Oil price has not been stable since the year 2003 and most recently in mid 2015 the price of oil took a sharp drop as it went below $28 dollars per barrel.
So many economies in the world has been hit by the changes in the price of oil, both negatively and positively.
Countries reliant on revenue generated from the sale of oil produce improve economically when oil prices are high, but when this prices drop, this countries are put into trouble economically, which can even lead to a recession.
But with so many nations feeling the impact of the recent drop in oil prices, many people have been wondering if this really affects the United States, or is this country immune to the effects of dropping oil price.
Here is an article which is going to clearly state to you how a drop in oil price can affect the United States of America.
Since this country is no longer an oil consuming nation but all an oil producing one, the price of oil influences the costs of other production and manufacturing across the United States of America.
When oil price drops globally it can also affect job growth and investment dollars in the US. You might be wondering how?
Let me break it down for you. The exploration and production on U.S. shale deposits has been a strong source of job growth over the years. Drilling activities requires labour. The set of people working on this drilling projects also supports local businesses like hotels, restaurants, and lots more.
When the prices of oil drops, there is going to be less drilling of U.S Shale oil and this can lead to layoffs which might in turn hurt the local businesses.
Though due to the incredibly diversified US economy, drop in oil price might just have little effect on the economy, as the economy of the country isn’t tied to the price of oil.
Unlike Russia, Venezuela, and Nigeria, the US economy can take a lot of hits and keep on going because there are so many sectors contributing to it.
Here is the bottom line
High oil prices can drive job creation and investment so also does it lead to higher transportation and manufacturing costs. Lower oil prices might hurt the unconventional oil activity, but benefits manufacturing.
