Here is what I recall. When gasoline prices where growing higher then shipment/deliver prices climbed. Restaurants, airlines and various other business raised their prices to absorb higher delivery prices.

Now that gasoline is considerably lower I'm NOT expecting restaurants and other business to lower their prices. So my guess is their profits increase.

Am I wrong?

You're probably correct. Prices go up because businesses have to cover the cost of operations. They go down through competition. Different market forces at play.

From an airline perspective, I doubt we'll ever see airfares drop again. The cost of entry for new carriers is pretty high compared to the 90s when we saw the last run of new start ups really go crazy. Consolidate has also knocked out about half of the major airlines ($1 bil + in revenue/yr) we use to have as well.

Here is what I recall. When gasoline prices where growing higher then shipment/deliver prices climbed. Restaurants, airlines and various other business raised their prices to absorb higher delivery prices.

Now that gasoline is considerably lower I'm NOT expecting restaurants and other business to lower their prices. So my guess is their profits increase.

Am I wrong?

It probably depends on how competitive there market is, but it probably will not go down that much, at best it might slow the eventual price increases from how labor costs generally rise over time

Most businesses pocket the increase as profit especially the way things are going in today's business world. Today's profitable times today can be the worst of times tomorrow. McDonald's reworked the dollar menu to a budget friendly menu. Instead of most of the menu being a dollar the menu will consist of low price items ranging from $1 to $5.

The good news is that you can still save a bundle by comparison shopping, buying when you have plenty of time to buy and making things at home when you can.

The thing I find laughable every year is the Black Friday Sales. Retailers act like they are giving merchandise away for pennies on the dollar when it reality. Your buying back stock that has sat in retail, wholesale and manufacture's warehouses for the last year or they are items especially made for the Black Friday Sales (Cheaply made with limited features that wear out quickly). They are still making money off the sale just not as much as they would have made when the item was brand new on the market.

The biggest thing that happens in a prolonged period of low gasoline prices is that it puts more money back into the hands of the average consumer who then goes out and buys products that in turn employ new workers. Cheap energy generally improves the standards of living for most Americans.

The lower energy prices of both NG and now crude oil are owed mostly to a drill, baby, drill, policy of the industry, that is now in the first inning of bring hundreds of years worth of fairly cheep new energy to the market around the world. The near stagnant economy has also helped hold prices down.

The geopolitical risk to the market is still pretty high, so the prices could go back up literately over night. With eventual new leadership in DC the economy will eventually return to more normal growth patterns and with it higher energy demand... So IMHO don't get to use to the low prices over the long run.

Low energy prices have always caused great harm the alternative fuels such as NG for transportation.
But this is often the very best the best time to buy a fuel efficient vehicle.

Low gasoline prices are the key to a higher standard of living? Maybe somewhere, but not on Earth.

https://www1.eere.energy.gov/vehiclesandfuels/images/facts/fotw569.jpg

Are you saying Iran and Venezuela aren't hot beds for economic growth and bursting democracies? :)

You should know better than to inject facts into a discussion Kerry. Shame on you.

Low gasoline prices are the key to a higher standard of living? Maybe somewhere, but not on Earth.
Cheap energy is with out doubt part of the equation for higher standards of living in our nation.
History show's this to be factual!

Well, maybe it's good for the U.S. economy (though JTF's graph compellingly disputes this), but cheap energy doesn't do much for OKLAHOMA'S standard of living. I've never understood why anyone in OKC would be excited about plummeting gas prices.

How low will the price of oil go? Most of the time when it falls, it meets resistance around $80 and then heads back up. It's done this almost once per year since at least 2008. I think its unlikely to fall to dangerous territory without an economic disaster.

Well, maybe it's good for the U.S. economy (though JTF's graph compellingly disputes this), but cheap energy doesn't do much for OKLAHOMA'S standard of living. I've never understood why anyone in OKC would be excited about plummeting gas prices.

Well for me...my wallet would love it (cheaper to drive to work since we don't have adequate transit to get me there) and secondly my employer would love it too. Fuel is a significant expense for us and the cheaper the better.

Well for me...my wallet would love it (cheaper to drive to work since we don't have adequate transit to get me there) and secondly my employer would love it too. Fuel is a significant expense for us and the cheaper the better.

I think cheaper oil is good for the economy as long as it doesn't go too low. $90/barrel isn't too low. If it falls to $60 or $50 I think we need to be worried.

Well, maybe it's good for the U.S. economy (though JTF's graph compellingly disputes this), .

Not really
Anybody who has made money trading energy interest over a perioud of time knows that cheaper energy helps improve the broader economy and that chart dosn't really mean very much as it realtes to improved lives.. As I indicated lower energy prices generally increase standards of living for most Americans. You need no further prove than to know and to have observe the disastrous negative impact that high oil prices have on the the worlds economy that has been demonstrated time and after time.

If high oil prices have a direct negative impact on disposable income then why wouldn't cheaper energy have a reverse impact to some degree and help the majority of people improve their lives?



High Oil Prices and Recessions
The WSJ shows this graph, linking oil price hikes to recessions:


http://www.oilprice.com/uploads/AB861.png
Figure 1. Wall Street Journal graphic showing connection between oil price rise and recession.
A Financial Times blog by Gavyn Davies says something very similar (http://blogs.ft.com/gavyndavies/2011/02/24/how-big-is-the-2011-oil-price-shock/):
Each of the last five major downturns in global economic activity has been immediately preceded by a major spike in oil prices. Sometimes (e.g. in the 1970s and in 1990), the surge in oil prices has been due to supply restrictions, triggered by Opec or by war in the Middle East. Other times (e.g. in 2008), it has been due to rapid growth in the demand for oil.

Impacts of High Oil Prices on the Economy

The graph shown in the WSJ is very familiar. On November 5, 2008, I wrote a post called Jeff Rubin: Oil Prices Caused the Current Recession (http://www.theoildrum.com/node/4727) that included this graphic from this publication of CIBC World Markets.
http://www.oilprice.com/uploads/AB862.png
Figure 2. Jeff Rubin's graphic showing connection of oil prices and recessions.



.
http://www.oilprice.com/uploads/AB866.png
Figure 6. Figure by Hall, Balogh, and Murphy showing relationship between oil price and recession.
Furthermore, other analyses show lower oil prices can lead to recessions. Charles Hall, Steven Balogh, and David Murphy did an analysis (http://www.mdpi.com/1996-1073/2/1/25)of the connection between the price of oil and when recession can be expected (Figure 6). In their view, recession is likely when oil amounts to more than 5.5% of GDP. When their analysis was done in 2008, this corresponded to a price of about $85 barrel.
"If rising oil prices leads to recession, what are the implications for future oil supply?"

"If there were no problem with oil prices leading to recession, prices could keep on rising as much as they need to, to encourage additional production and to encourage alternatives. It is the fact that high oil prices cause recession, and the fact that recession tends to causes oil prices to drop, that prevents oil prices from continuing to rise, in a fashion that would allow oil companies, and makers of alternatives to be able to rely on the higher prices. This hampers the continued growth of oil supply."

I think cheaper oil is good for the economy as long as it doesn't go too low. $90/barrel isn't too low. If it falls to $60 or $50 I think we need to be worried.That's about right IMHO, although I would say that the figure to worry is closer to the $70 range now...

But low oil prices spur demand via an improved economy but they also cause drilling cut backs which in turn only set us up for a further price spikes down the road and the disastrous price shocks.

my employer would love it too. Fuel is a significant expense for us and the cheaper the better.

One of the best trades historically has been to short the airline stocks and travel industry when oil prices are going up.

I think cheaper oil is good for the economy as long as it doesn't go too low. $90/barrel isn't too low. If it falls to $60 or $50 I think we need to be worried.

$50-60 I'll be cheering all the way to the bank in profit sharing. Though it would be bad for Oklahoma since it still has significant exposure to it.

Adequate transit options. Is that really being used to make a point. Why some are not practicing what they preach? Seems like there are a lot of options other than having to depend on the State to run a better bus schedule. A person could move closer to where he or she worked, A person could get up earlier and ride a bike, A person could walk if they lived closer to work or some don't mind walking long distances to get where they're going its called exercise so less time in the gym, A person could figure out how to make the bus system work if they really wanted too. I would never respect a person's opinion that does not practice what they preach. I may not agree with everything that Sid says but I can respect where he is coming from.

Adequate transit options. Is that really being used to make a point. Why some are not practicing what they preach? Seems like there are a lot of options other than having to depend on the State to run a better bus schedule. A person could move closer to where he or she worked, A person could get up earlier and ride a bike, A person could walk if they lived closer to work or some don't mind walking long distances to get where they're going its called exercise so less time in the gym, A person could figure out how to make the bus system work if they really wanted too. I would never respect a person's opinion that does not practice what they preach. I may not agree with everything that Sid says but I can respect where he is coming from.LOL.. There is a lot of practice what I say and not what I do from some of the most frequent posters on here. They are very critical, intolerant and sometimes very bigoted about different points of view that are often common main stream views held by the general public. But the really funny thing is that in most cases my energy consumption and carbon foot print is far below most.