BREAKING: OIL COMPANIES DROP A BOMSHELL ABOUT 2015 GAS PRICES

Source: Conservative Tribune
Recent gas prices have given people an extra reason to celebrate the new year. It wasn’t that long ago that prices were over $4 per gallon in many places, and it appeared that the number would only go up. Now, prices at the pump are closer to $2 in many parts of the country — and if a new report is correct, those healthy prices could be here to stay.

Recent information has revealed that major oil companies are hedged to benefit from falling oil prices.

Hedging is essentially educated financial betting on various outcomes. In simple terms, oil companies have strong financial incentives for gas prices to stay low in the foreseeable future.

Without hedging, the dramatic drop in worldwide prices could have severely impacted oil company profits. That could have motivated those corporations to hike prices back to previous levels, in order to maximize earnings.

Instead, something else appears to be happening. According to The Blaze, oil company managers realized that global prices were going to drop, and they took a smart financial position–they bet money that oil would stay low.

Those bets are now paying off and essentially shielding the corporations from lost revenue caused by the dropping prices.

For the time being, that forward-looking financial move appears to be working well for companies and the American people. The oil industry is pleased that they are staying profitable, and drivers are smiling every time they fill up at the pump.

Many politicians, including Barack Obama, have tried to take personal credit for the drop in gas prices. In reality, the credit belongs to American shale oil expansion (expansion that Obama his environmentalist friends hate) and an OPEC that refuses to cut output for fear of lost income due to lower prices because new shale oil is flooding the market.

What we’re seeing actually vindicates the free market. Had government not stood in the way of domestic oil production for so long, American crude producers could have added more oil to the market years ago, driving down prices and shattering OPEC. Gas at $4 per gallon was solely a function of liberal policies that couldn’t keep up with demand.

No one can perfectly predict what markets will do in the coming months and years. However, these could be positive signs that 2015 will not be filled with doom and gloom.

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