Cheap oil and gas is effectively a tax cut though. It stimulates consumer spending. The question is what will people spend it on if they are afraid to go places? Restaurants are usually a big winner of cheap gas prices. Someone is going to benefit, since we all know Americans are horrible at saving money.
It’s probably time to do some XLE puts though. Over supply is going to last for awhile.
Now that we are producing a lot of shale, lower oil price is no longer a clear big win for us. Net net it’s still good for the economy but the sudden collapse of oil prices is most certainly not. More than a few shale drillers could be taken down and whoever owns their credit could be in a world of hurts.
