The plunge in oil prices — they have dropped 57 percent since late June — will have mixed effects on economies, says Bill Greiner, chief investment strategist of Mariner Holdings.
"The economic growth of nations consuming oil will benefit mightily at the expense of oil-producing nations," he writes in an article for
Forbes.
The effects will be mixed within some economies too, Greiner says.
"Segments of our domestic economy will struggle. Capital spending growth will be stunted. Segments of the high-yield fixed income market will struggle," he predicts.
But consumers will benefit, as falling gasoline prices boost their spending power. U.S. families on average spend 4 percent of their income on gas, Greiner notes.
"The bonus of falling gasoline prices (and heating oil, and natural gas) should provide stimulus to overall consumption patterns in 2015."
Retail gasoline prices have dropped to a five-year low of $2.10 a gallon.
Oil prices will rebound at some point, Greiner says. "We do know oil demand will rise as the global economy grows. Oil investments, while currently out of favor, will return to favor. It is just a matter of time and price."
Meanwhile, Nobel laureate economist Robert Shiller of Yale University says it is difficult to determine exactly how the oil price plummet will affect the economy.
"Historically, business cycles have been associated with oil prices," he tells
CNBC.
"The 1973-74 recession was an oil price spike. And 1979-80, another oil price spike. These are the big recessions of our time" outside of the most recent one.
Oil price movement also affects consumer confidence, Shiller notes. "It really affects psychology," he explains.
"It's hard to say exactly how it will affect psychology in this case, when we are suddenly losing a huge profit from the new technology [fracking]. This country is proud of our oil technology. And it's been boosting our spirit — animal spirits. It's hard to predict where they will go."
© 2026 Newsmax Finance. All rights reserved.