SPRINGFIELD, Mass. (WWLP)– U.S. stocks struggled throughout the morning, with the DOW down more than 500 points by midday. Many are pointing fingers to dropping oil prices are part of the reason.
Soon after Wednesday’s opening bell energy stocks lead with another sell-off on Wall Street. By midday oil prices were just under $28 a barrel. Compared to just over a year ago when oil prices were roughly $100 a barrel.
Financial Advisor Mark Teed told 22News the price drop is a reminder global growth has slowed. “If oil prices are going up it would mean that more people are demanding oil to run their state, county, country, etc. and the demand for oil would be a good sign that economic growth is picking up,” Teed said.
He also said the ongoing market woes have been a disappointing start to the New Year, but for long term investors, shares are now being reinvested at lower prices.
Low oil prices may be unnerving the market, but it’s also what’s keeping gas prices under $2 a gallon. Even though it seems too good to be true for the low gas prices you’re seeing right now at the pump to stay low, some experts say it’s possible.
“Yeah it could be several months down the line. The gasoline that’s being pumped right now was purchased months ago,” Karl Petrick, Professor of Economics at Western New England University, told 22News. He also said oil companies will begin to switch their products to a more expensive summer blend come March. But if there is still an over-supply and a low demand for oil, as there is now, Petrick says prices are likely to stay down.