It has been almost six years since Americans spent this little on gas at the pump. And although these prices put a smile on my face when I uncork my gas cap; I also worry a bit. I understand that I have a flaw in my brain that looks for both positives and negatives of almost everything. My wife is less than thrilled with this and makes me “knock on wood” every time that I bring up a good outcome of any situation; because she knows she is about to hear the “devil’s advocate” that has permanent lodging in my brain.

Pumping Gas in Northbrook IL.

Pumping Gas in Northbrook, IL.

The lowest price in the area today was at Thorntons on Skokie Valley Rd in Highland Park, where regular unleaded was going for $2.44; $0.01 below the national average. Chicago gas prices are slightly higher. So what am I worried about? In short, low gas prices make me worry about everything.

The U.S. has spent the bast half century as a net importer of fuel. T. Boone Pickens, a major Texas oil man, once considered this purchase of oil from foreign governments to be the biggest drain on the U.S. economy in history. You can read all about it here: Pickens Plan But that story has recently done a 180. With recent technological innovations, including multi-directional drilling and fracking, the U.S. became the third largest producer of oil in the world; behind only Russia and Saudi Arabia. This drop in oil prices did indeed hurt consumer spending in the U.S. which showed a drop of 0.2% in January according to numbers released by the Bureau of Economic Analysis on Monday.

So it seems like oil prices took a dive when U.S. business were finally poised to get our share. But the hurt American Oil companies may be feeling is also heavily offset by American consumers. These consumers have a reputation for taking any money they are saving in one area and immediately deploy those savings on any number of different areas. And they have been. If we adjust the numbers released by the BOEA for inflation and take out oil spending would have risen by 0.3. So it appears that the lower pump prices are a “boom” for the rest of the economy.

Beyond the benefit of having more money to spend, it also appears that Americans have taken the opportunity to vastly increase savings. January numbers showed that Americans were saving at a rate that we haven’t seen in years.

How much U.S. and world economies will be hurt or helped by the rapid decline in oil prices is still being evaluated. We simply don’t know how long oil prices will stay at depressed levels; and there are simply too many variables to predict these after effects with any accuracy. I don’t know what OPEC is going to do tomorrow, much less six months from now. All we can do is enjoy it while it lasts; and pocket the money for the next rainy day. And we have been.

Story By:  Adam Faust, Founder – Deep Blue Financial LLC