A new study shows an interesting correlation between gasoline prices and property values for those living in the city. Additionally, low gas prices might prove beneficial for the petrochemical industry and industry experts pressure the U.S. to lift its ban on energy exports.
Despite falling gas prices, industry experts from Southwestern Energy say that this could be good news for the petrochemical industry. Given the low price and high supply of oil, experts believe that the United States should be able to initiate petrochemical expansions. In the Houston area, $40 billion of projects are currently planned.
According to a new study conducted by Brookings Institution, gasoline prices have a likely impact on home property values. In a study based on the sales of over 900,000 homes, researchers discovered that a 10 percent increase in gasoline prices typically leads to an increase in property value for houses near the city, at the same time reducing property values for houses further away. These results could be in response to residents becoming more aware of longer commutes during times of high gas prices.
The recent drop in crude oil prices have led industry experts to believe that it is now the time to end the current ban on U.S. exports. By lifting the 39-year-old ban, experts argue that U.S. refineries could possibly benefit from a larger global consumer base. “This is a global competition for market share,” said Erik Milito, from the American Petroleum Institute. “These other regions around the world want to raise the competitive pressure on U.S. energy and we’re asking our policymakers to at least put the U.S. on a level playing field.”
In the aftermath of OPEC’s decision in maintaining their output target of 30 million barrels a day, crude oil has recently fallen below $70 a barrel. At the same time, according to the Energy Information Administration, domestic oil production has risen to 6,000 barrels a day thanks to more profitable drilling practices in shale formations. Although the U.S. continues operating with high production levels, industry experts remain wary of falling oil prices that will inevitably slow down drilling as profits decrease.