Stock Market is Bullish After Gas Prices Rise

Gas Prices
As millions of Americans travel across the country for the holidays, oil prices are up nearly 30 cents per gallon, according to a new report by the AAA. (Vladimir Skopcev/Shutterstock.com)

As millions of Americans travel across the country for the holidays, oil prices are up nearly 30 cents per gallon, according to a new report by the AAA. While, US consumers are feeling the affects of rising gas prices at the pump, stockholders are seeing a bullish market with growing oil prices.

OPEC
Stock Photo: VIENNA – JUL 22: Building Organization of the Petroleum Exporting Countries (OPEC) on July 22, 2012 on Helferstorferstrasse 17 in Vienna, Austria. (Slavko Sereda / Shutterstock.com)

The Middle east and oil producing countries have recently agreed to cut oil production. Consequently, Brent crude prices have gone up some 8 percent. Other oil producing countries are also looking to cut production. Albeit at different levels. This news is starting to affect oil related stocks for the better. Oil related stocks have risen modestly in the past weeks. But a small increase is a good thing. Especially, considering there has been approximately 2 years of low oil prices.

OPEC Cuts Oil Production

The cutting of production is a strategy to increase the price of oil per barrel. This strategy will work, if all the countries cooperate. At the moment, OPEC members seem comfortable with the production of oil in the United States. But, if a country gets greedy and moves to increase their personal share of the market by increasing oil production, then you can expect OPEC to again flood the market with oil production. 

Gas Prices
Stock Photo: SACRAMENTO, USA – SEPTEMBER 5, 2013: High Shell gas price on September 5, 2013 in Sacramento, California. California holds the leading position in continental US for the fuel cost. (Sergey Yechikov / Shutterstock.com)

In an odd way, this somewhat demonstrates the continued conversation of a world economy. Illustrating how much we all are interdependent on each other to cooperate. A balance between using resources and conserving natural resource  raises the topic of reducing our dependence on fossil fuel and to move towards more renewable energy sources such as wind, natural gas, solar, etc.

As usual, there is little to no conversation about how much people will pay for gas at the pump in the United States due to rising oil prices. However, it is clear that OPEC’s decision to cut oil production is affecting Americans this holiday season.

Ultimately, the market for oil is bullish and it is anticipated to continue to be bullish into 2017 as well.

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Reginald Edward
Reginald has over 20 years of experience in business and technology. Reginald has an undergraduate degree in economics and completed post graduate work in business. He has extensive experience in a variety of fields, including: finance, media relations, marketing, strategic planning, public policy, and administration.